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April 1, 2021

Annual Addition Limit

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Definition

The annual Addition limit is the maximum amount that may be added to a defined contribution plan on behalf of a participant for any plan year. The maximum amount is the lesser of the following: (a). 100% of the participants compensation for the year or  ( b). The dollar limit that is in effect for the year

The dollar limits for are as follows:

Year

Limit

2008

$46,000

2009

$49,000

2010

$49,000

2011

$49,000

2012

$50,000

2013

$51,000

2014

$52,000

2015

$53,000

2016

$53,000

2017

$54,000

2018

$55,000

2019

$56,000

2020

$57,000

2021$58,000

Referring Cite

IRC § 415(b)(1)(A) and IRC § 415(c)(1)(A), Treas Reg §1.415(c)-1

Additional Helpful Information

  • The term annual additions generally means the sum for any year of employer contributions, employee contributions, and forfeitures.
  • For plans that include salary deferral features, individuals who are at least age 50 by the end of the year may make catch-up contributions in addition to the annual addition limit, if catch-up contributions are permitted under the plan.

Written By

Retirement Dictionary Staff

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