You know what I hate? When I want to look something up real quick but instead of making it easy on me, the author of an article has a loquacious lead up with a plethora of unnecessarily flowery words just to get to the information I want. Where do they get off?!
So, here’s the quick facts on the 2021 limits for IRAs and 401(k)s in the United States:
Traditional and Roth IRAs
For the 2020 tax season, your contribution limit was $6,000 (with an additional $1,000 catch-up contribution allowed for folks over the age of 50) to either a traditional or Roth IRA.
- Remember you can contribute this amount all the way until April 22, 2021.
For the 2021 tax season, the maximum you can contribute remains the same at $6,000 (with the same additional $1,000 catch-up contribution allowed for folks over the age of 50) to either a traditional or Roth IRA.
- Again, you can contribute this amount all the way until April 22, 2022.
Also remaining the same for the 2021 tax season, the annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the government’s Thrift Savings Plan is $19,500 (with the same additional $6,500 catch up contribution allowed for folks over the age of 50).
The cutoff date for turning 50 and making these catch-up contributions is Dec. 31st, 2021.
Here’s to hoping the IRS increases both of these limits in the coming years. I like the psychological benefit that comes from knowing I can’t touch my retirement money in these accounts. There is also a lot of data that suggests 401(k)s are helping people save like never before.
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