2021 Contribution Limits

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Two years ago in 2019 was the first time since 2015 that the IRA contribution limit was increased. There was some wishful thinking that the increases would continue, but alas, in both 2020 and 2021 the base limit is remaining the same at $6,000 and the contribution catch-up remains at $1,000.

Health Saving Account (HSA) contribution limits saw an increase for the second year in a row though, with $50 to the base individual and $100 to the base family limits. However, in the face of such outrageously high insurance premiums these small balances are perhaps not as exciting as they should be.

The only other contribution limit to change is the limitation for defined contribution plans used by employer contributions which saw a $1,000 increase again this year.

As always, we recommend updating your contributions to meet these new maximums.

If you are stretched thin and are thinking, “I can’t afford to save more!” You might appreciate reading our articles “Fund Your Roth IRA Even When You Can’t Afford It” and “How to Convert Taxable Savings Into Your Roth IRA.”

A Roth IRA can actually make a great place to store your emergency fund. Even though it is a retirement account, Roth IRAs have the special provision that you can always withdraw the amount you contributed for any reason and at any age. If you have the free cash, fully funding your Roth IRA is normally the right decision.

Tax Year 2021

Account Type Requirements Contribution Limit Change from 2020
Traditional or Roth IRA Contribution

(subject to phaseouts, limited by wages)

Age 49 and under $6,000 No change.
Age 50 and over $7,000
Employee Elective Deferral
401(k) or 403(b) plans
Age 49 and under $19,500 No change.
Age 50 and over $26,000
Employee Deferred Compensation
457(b) plans
Age 49 and under $19,500 No change.
Age 50 and over $26,000
Employee Elective Deferral
SIMPLE 401(k) or IRA Plan
(with further limitations)
Age 49 and under $13,500 No change.
Age 50 and over $16,500
SEP IRA Employer Contribution

401(k), 403(b), or 457 plans Employer Contribution

The smaller of: $58,000

or 25% of compensation

+$1,000 to the limitation for defined contribution plans
Health Savings Account (HSA) Contribution Single Plan Age 54 and under  $3,600 +$50 to base single contribution limit

+$100 to base family contribution limit

catch-up remains at $1,000

Age 55 and over $4,600
Family Plan Age 54 and under $7,200
Age 55 and over $8,200


You can find the current contribution limits here: Account Contribution Limits
the IRS page on the same topic here: Retirement Topics – Contributions

Featured Image by Melissa Walker Horn on Unsplash

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Chief Operating Officer, CFP®, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 800 financial articles and is known for her expertise on tax planning.