The government’s annual cost-of-living adjustments (COLA) for 2021 have been announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA).
- The COVID-19 pandemic’s continuing impact on the U.S. economy contributed to relatively flat changes in the 2021 COLA amounts as U.S. economic deflation during the first half of 2020 impacted the COLA metrics.
- The IRS increased the IRS annual compensation amounts, but limits for elective deferrals and catch-up contribution limits for age 50+ employees remained largely unchanged.
- The SSA’s 1.3 percent increase in benefits is one of the smallest increases historically for Social Security and Supplemental Security Income beneficiaries.
|
2021 |
2020 |
2019 |
2018 |
2017 |
|
401(a)(17)/404(l) Annual Compensation |
$290,000 |
$285,000 |
$280,000 |
$275,000 |
$270,000 |
|
402(g)(1) Elective Deferrals |
19,500 |
19,500 |
19,000 |
18,500 |
18,000 |
|
408(k)(2)(C) SEP Minimum Compensation |
650 |
600 |
600 |
600 |
600 |
|
408(k)(3)(C) SEP Maximum Compensation |
290,000 |
285,000 |
280,000 |
275,000 |
270,000 |
|
408(p)(2)(E) SIMPLE Maximum Contributions |
13,500 |
13,500 |
13,000 |
12,500 |
12,500 |
|
409(o)(1)(C)(ii) ESOP Limits |
1,165,000 230,000 |
1,150,000 230,000 |
1,130,000 225,000 |
1,105,000 220,000 |
1,080,000 215,000 |
|
414(q)(1)(B) HCE Threshold |
130,000 |
130,000 |
125,000 |
120,000 |
120,000 |
|
414(v)(2)(B)(i) Catch-up Contributions |
6,500 |
6,500 |
6,000 |
6,000 |
6,000 |
|
414(v)(2)(B)(ii) Catch-up Contributions |
3,000 |
3,000 |
3,000 |
3,000 |
3,000 |
|
415(b)(1)(A) DB Limits |
230,000 |
230,000 |
225,000 |
220,000 |
215,000 |
|
415(c)(1)(A) DC Limits |
58,000 |
57,000 |
56,000 |
55,000 |
54,000 |
|
416(i)(1)(A)(i) Key Employee |
185,000 |
185,000 |
180,000 |
175,000 |
175,000 |
|
457(e)(15) Deferral Limits |
19,500 |
19,500 |
19,000 |
18,500 |
18,000 |
|
1.61-21(f)(5)(i) Control Employee |
115,000 |
115,000 |
110,000 |
110,000 |
105,000 |
|
1.61-21(f)(5)(iii) Control Employee |
235,000 |
230,000 |
225,000 |
220,000 |
215,000 |
|
219(b)(5)(A) IRA Contribution Limit |
6,000 |
6,000 |
6,000 |
5,500 |
5,500 |
|
219(b)(5)(B) IRA Catch-Up Contributions |
1,000 |
1,000 |
1,000 |
1,000 |
1,000 |
|
Taxable Wage Base for Social Security |
142,800 |
137,700 |
132,900 |
128,700 |
127,200 |
