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2021 retirement plan contributions have been released. While the majority of limits remain unchanged, there are a few updates to note. Here’s a summary!

401(k)s. The $19,500 limit remains unchanged as does the $6,500 catch up contribution for anyone over age 50. However, the overall limit increases from $57,000 to $58,000.

IRAs. Limits stay at $6,000 for Traditional and Roth IRAs or $7,000 if you are 50 or older in 2021.

Roth IRAs Income Phase-Out. Though limits didn’t increase, you can earn a little more and still make a contribution. For 2021, the income range is $198,000 to $208,000 for married couples and $125,000 to $140,000 for singles and heads of household. If you make too much to contribute directly, the Backdoor Roth IRA could still be an option for you!

Solo 401(k)s & SEP IRAs. Limits for Solo 401(k)s and SEP IRAs increase to $58,000, a $1,000 increase from last year.

SIMPLE IRAs. Limits for SIMPLE IRAs stay at $13,500 or $16,500 if you are 50 or older in 2021.

Health Savings Accounts. HSA limits get a small bump up to $3,600 for individuals and $7,200 for families covered under qualifying family plans. The catch up contribution – which applies to those 55 or older for HSAs – stays at $1,000.

Questions? Don’t hesitate to reach out…we’re here to help!

The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.

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