2021 IRA CONTRIBUTION LIMITS

2021 IRA contribution limits. Retirement savers will be able to defer paying income tax on up to $6,000 in an individual retirement account in 2021. Workers with slightly higher incomes will also be eligible to save for retirement in traditional and Roth IRAs and qualify for the saver’s tax credit. Here are the limits for 2021: The IRS contribution limit is $6000, the IRA catch up contribution limit will remain $1000 for those age 50 and older. 401(k) participants with incomes below $76,000 ($125,000 for couples) are additionally eligible to make traditional IRS contributions. The Roth IRA income limit is $140,000 for individuals and $208,000 for couples. The savers credit income limit is $33,000 for individuals and $66,000 for couples. You should consider these IRS rules when making retirement savings decisions in 2021. 2021 IRA contribution limits.

The maximum IRA contribution for 2021 is $6,000, the same as in 2020. Retirement savers age 49 and younger can max out an IRA in 2021 by saving $500 per month or making a deposit any time before the 2021 IRA contribution deadline of April 15, 2022. “Monthly or quarterly contributions are good, because of dollar cost averaging,” says Megan Donnelly, a certified financial planner for Quabbin Advisors in Wilbraham, Massachusetts. This will maximize the return they receive on the investment portfolio over time.

The IRA catch up limit for 2021. Workers age 50 and older can make an extra $1000 catch up contribution to an IRA in 2021, for a maximum possible IRA contribution of $7,000 in 2021. The IRA catch up contribution limit is not subject to an automatic annual cost of living adjustment. Traditional IRA income limits for 2021. Workers who don’t have a 401(k) plan or similar type of retirement account thru their job can contribute to a tax deductible IRA regardless of how much they earn. However, employees who are eligible for a 401(k) plan may be prohibited from additionally claiming a tax deduction on an IRA contribution if they earn too mcuh.