The IRS released the 2020 Income Limits and Contribution Limits in case you were sitting on the edge of your seat waiting to tax plan for next year. The good news is that the employee Contributions for IRA accounts remain unchanged from 2020 to 2021. So if you are bad at math, keep contributing what you have been contributing.
However, the income limits are increasing based on cost-of-living increases. So if you were on the edge last year of receiving full tax benefits, you may catch a tiny break this year.
As a recap, the 401k plans at work contribution is $19,500 for 2020. However, if you are aged 50 and over, you can contribute an additional $6,500. (Woo-hoo! I am not personally contributing that much but I guess it’s nice to know you can. Actually, I am not even contributing to a 401k account since I am part-time employed as a contractor. I contribute to a Roth IRA instead).
You can contribute money to IRA accounts based on income limits. If you are a single taxpayer and covered by a workplace retirement plan, the phase out rage is $66,000 to $76,000 for 2021 ($65,000 to $75,000 for 2020).
If you are a married couple filing jointly and covered by a workplace retirement plan, the phase out rage is $105,000 to $125,000 for 2021 ($104,000 to $124,000 for 2020).
If you are a married couple and one person is not covered by a workplace retirement plan and is married to someone who is covered, the phase out rage is $198,000 to $208,000 for 2021 ($196,000 to $206,000 for 2020).
If you have any further questions or details, then you can visit the IRS and view the original documents at:
Hope this helps when contributing to your retirement!