Ready to save money for retirement? It’s helpful to be aware of current retirement contribution limits so you know how much cash you’re allowed to stash in different types of investment vehicles.
In this article, we’ll let you know how much you’re allowed to put in each type of account in 2021.
The maximum retirement contribution limits for a variety of things like 401(k)s, Roth IRAs and more tend to go up over the years. Here's how much you'll be allowed to contribute next year, broken down by category, according to the Internal Revenue Service (IRS).
Here Are Your Retirement Contribution Limits for 2021
Traditional 401(k) and Roth 401(k) Limits
A 401(k) offers you a tax break upfront through a payroll deduction today, but the money will be taxed when you withdraw it during retirement. Any matching contribution your employer makes does not count against your limit.
- 2021 Limit: $19,500
- 2021 Catch-Up Contribution Limit for Individuals Age 50 and Over: $6,500 (for a total of $26,000)
IRA Limits
Individual retirement accounts also give you a tax break upfront with taxes deferred until you pull out the money out down the road.
- 2021 Limit: $6,000
- 2021 Catch-Up Contribution Limit for Individuals Age 50 and Over: $1,000 (for a total of $7,000)
Roth IRA Limits
Roth IRAs are different from traditional IRAs in how the government taxes them. With a Roth, you contribute after-tax dollars today. But the money is not taxed again when you withdraw it during retirement.
- 2021 Limit: $6,000
- 2021 Catch-Up Contribution Limit for Individuals Age 50 and Over: $1,000 (for a total of $7,000)
403(b) Limits
A 403(b) is a retirement plan for those who are employed by public school systems and tax-exempt organizations.
- 2021 Limit: $19,500
- 2021 Catch-Up Contribution Limit for Individuals Age 50 and Over: $6,500 (for a total of $26,000)
457 Limits
A 457 is a retirement plan for governmental and certain non-governmental employers in the United States.
- 2021 Limit: $19,500
- 2021 Catch-Up Contribution Limit for Individuals Age 50 and Over: $6,500 (for a total of $26,000)
Final Thought
Retirement is one of those things that you can’t leave for another day. The time to save is today.
If you haven't started saving for retirement, use Team Clark's guide to learn how to begin investing.
Do you have any retirement questions? Contact Clark’s free Consumer Action Center for help and advice.
More Investing & Retirement Resources From Clark.com:
- How to Start Investing and Saving for Retirement
- 6 Things to Know Before You Start a 401(k)
- How to Open a Roth IRA in 5 Steps
The post 2021 Retirement Contribution Limits: 401(k), Roth IRA, Traditional IRA and More appeared first on Clark Howard.
