As we begin the New Year, we wanted to provide a brief update on contribution and gifting limits, and eligibility requirements for 2021.
Whether you are an active participant in a workplace plan, contributing to an individual retirement plan, or simply planning to do some annual gifting, it is important to be aware of the current regulations, in order to make the proper investment decisions.
If you are an active participant in an employer-sponsored retirement plan, you can contribute the following:
401(k)
Under 50: $19,500
Age 50 or over: $26,000
SEP IRA or Solo 401(k)
The lesser of $58,000 or 25% of compensation
SIMPLE IRA
Under 50: $13,500
Age 50 or over: $16,500
If you are contributing to an Individual Retirement Account:
IRA and ROTH IRA Limits
Under 50: $6,000
Age 50 or over: $7,000
NOTE: There are income phaseout limits for ROTH IRA eligibility
Married/Joint: $198,000 or Less
Single: $125,000 or Less
If you are contributing to a Health Savings Account:
Under 55
Individual: $3,600
Family: $7,200
Age 55 or over
Individual: $4,600
Family: $9,200
If you are gifting to another person:
Gift Tax Exclusion Limit: $15,000
Gifting into 529 or UTMA Accounts, up to $15,000 (or $30,000 per couple) can be gifted annually into those accounts without having to file a federal gift tax return.
Additionally, the 2020 election results increased the potential for changes in tax laws moving forward, both on a corporate and individual level. If any changes come to light, we will keep you informed, and we welcome any discussions about how those would impact you personally.
IMPORTANT DISCLOSURES
Investment advice offered through Strauss Financial Group, Inc., a Registered Investment Advisor.
These materials, opinions, analyses, and information are provided for general informational purposes only based upon sources believed to be reliable and in good faith—but are not considered all-inclusive, and no representation or warranty of any kind, expressed or implied, is made concerning accuracy, completeness, correctness, timeliness or appropriateness. In addition, we undertake no obligation to update such opinions, analysis or information, and no warranty or guarantee is made. The information in these materials may change at any time and without notice. Neither the information nor any opinion expressed herein constitutes a solicitation for the purchase or sale of any securities and should not be relied on as financial advice. Please consult your attorney and/or accountant regarding legal and tax issues. Past performance is no guarantee of future results. All investing involves risk, including the potential loss of principal, and there can be no guarantee that any investing strategy will be successful. Prices, quotes, rates, and yields are subject to change without notice. Not FDIC Insured, Not Bank Guaranteed, and May Lose Value.