The IRS recently announced it is not increasing contribution limits for 401(k) or 457 accounts for the 2021 tax year. Here’s what that means if you are enrolled in the Texa$averSM 401(k) / 457 Program.
- The contribution limit for 401(k) and 457 accounts remains $19,500 in 2021.
- The age 50 catch-up limit in 401(k) and 457 accounts remains $6,500 for 2021. This would make $26,000 the maximum possible contribution for accountholders who are 50 years or older.
Special 457 plan catch-up contribution amount
The special 457 catch-up contribution limit also remains at $19,500 for 2021. If you are within three years of normal retirement age, you can contribute up to a maximum of $39,000 to your 457 plan in 2021. The additional amount you may be able to contribute under the special 457 catch-up contribution will depend on the amount you were able to contribute in previous years but did not.
Please note: If you are eligible for both the age 50 catch-up and special 457 catch-up, you may not take advantage of both in the same calendar year.