Back to News

2021 Cost-of-Living Adjustments

Published on

October 27, 2020

The IRS and Social Security Administration have announced the 2021 cost-of-living adjustments for retirement plans.

Here are some of the more significant limitations affecting employee benefit plans:

  • The maximum amount that may be deferred under 401(k), 403(b) and 457(b) plans, not including catch-up deferrals, remains unchanged at $19,500, according to under Internal Revenue Code Section 402(g) limit.
  • The IRC Section 415 maximum annual benefit under a defined benefit plan will remain at $230,000.
  • The IRC Section 415 maximum annual additions under a defined contribution plan will be increased by $1,000 to $58,000. The increase is subject to the overall limitation of 100% of compensation.
  • The highly compensated employee threshold dollar limit remains unchanged at $130,000.
  • The maximum amount of compensation that may be taken into account for benefit purposes under a qualified plan will be increased from the current limit of $285,000 to $290,000.
  • The catch-up deferrals to 401(k), 403(b) and 457 plans will remain unchanged at $6,500. Please note that the catch-up deferrals are only available for plan participants who turn 50 at any time during the plan year and who may no longer make deferrals because of plan or regulatory limitations.
  • The Social Security taxable wage base is up to $142,800, increased by $5,100.


If you have questions about any of these adjustments, please contact me or anyone in the Barley Snyder Employee Benefits Group.


Related News

View More News
Press Release
August 21, 2025

Barley Snyder Attorneys Recognized by Best Lawyers in America

For Immediate Release Lancaster, Pa. – Barley Snyder is proud to announce that 51 of its attorneys have been recognized by...

Learn More
News Alert
August 13, 2025

Back to School, Back to Work: A Refresher on Employing Minors in Pennsylvania

As Pennsylvania students return to school, it’s time for employers to revisit and reinforce their child labor protections. ...

Learn More
News Alert
August 12, 2025

ULP Charges Now Subject to Immediate “Deferral” Analysis per New NLRB Memorandum

On Thursday August 7, 2025, the National Labor Relations Board (“NLRB” or “Board”) Acting General Counsel William B. ...

Learn More

Other Upcoming Events

View All Upcoming Events
Oct
07
2:30 pm
-
6:00 pm
event
Location

2025 York Business Seminar

Learn More
Oct
14
2:30 pm
-
6:00 pm
event
Location

2025 Harrisburg Business Seminar

Learn More
Oct
30
2:30 pm
-
6:00 pm
event
Location

2025 Lancaster Business Seminar

Learn More

Get in Touch

Our attorneys, paralegals and staff look forward to hearing from you. Please reach out to let us know how we can help.

Get In Touch
RECOGNIZED IN
Super Lawyers
Best Law Firms US News
Best Lawyers