--- title: Maximum Pension Limits for 2021 - RMC Group description: Many employee benefits are subject to annual dollar limits that are occasionally increased due to inflation. Some are changing in 2021 image: https://rmcgp.com/hubfs/blog9.jpg --- [ ← Back to Blog ](https://rmcgp.com/blog) # Maximum Pension Limits for 2021 Written By RMC Group Published on: November 6, 2020 ![Maximum Pension Limits for 2021](https://rmcgp.com/hubfs/blog9.jpg) ### **Overview ** Many employee benefits are subject to annual dollar limits that are occasionally increased due to inflation. The Internal Revenue Service (IRS) recently announced cost-of-living adjustments to the annual dollar limits for various welfare and [retirement plan](https://rmcgp.com/retirement-planning/) limits for 2021. Most of the limits will remain the same, but some of the limits will increase effective January 1, 2021. The following are some [important limits in effect for 2021](https://rmcgp.com/wp-content/uploads/2020/11/Pension-Limits-2021.pdf): - Maximum compensation for plan purposes is $290,000 - Maximum monthly benefit for defined benefit plans ages 62 to 65 is the lesser of 100% of compensation or $19,166.67 with an annual benefit $230,000 - Highly Compensated Employee compensation $130,000+ - Maximum Defined Contribution / Profit Sharing Contribution $58,000 - Maximum SEP Contribution $58,000 - Maximum 401(k) Contribution $19,500. Catch-up Contribution for age 50 and over $6,500 - Maximum SIMPLE Contribution $13,500 ### **Plan Ahead** Employers should update their benefit plan designs with these new limits, and make sure that their plan will reflect the new 2021 limits. Employers may also want to communicate the new benefit plan limits to their employees. [Click here](https://www.irs.gov/retirement-plans/cola-increases-for-dollar-limitations-on-benefits-and-contributions) to read the full IRS announcement. ## Related Blog Posts [![Closing the Gap: What Women's Retirement Security Day Means for Your Future](https://rmcgp.com/hubfs/RMC%20-%20Blog%20Header-Jul-08-2026-07-55-51-4334-PM.png) ](https://rmcgp.com/blog/closing-the-gap-what-womens-retirement-security-day-means-for-your-future) ### [Closing the Gap: What Women's Retirement Security Day Means for Your Future](https://rmcgp.com/blog/closing-the-gap-what-womens-retirement-security-day-means-for-your-future) On Women’s Retirement Security Day, we spotlight the retirement savings gap between women and men—and what you can do about it. Building a secure retirement isn't easy for anyone. But for women, the... [Read More](https://rmcgp.com/blog/closing-the-gap-what-womens-retirement-security-day-means-for-your-future) [![The IRS Announces Health Plan Limits For 2027](https://rmcgp.com/hubfs/RMC%20-%20Blog%20Header%20(2)-Jun-01-2026-09-11-11-7643-PM.png) ](https://rmcgp.com/blog/the-irs-announces-health-plan-limits-for-2027) ### [The IRS Announces Health Plan Limits For 2027](https://rmcgp.com/blog/the-irs-announces-health-plan-limits-for-2027) On May 29, 2026, the IRS issued Rev. Proc. 2026-24 in which it announced cost-of-living adjustments for Health Savings Accounts (HSAs), High-Deductible Health Plans (HDHPs) and excepted benefit... [Read More](https://rmcgp.com/blog/the-irs-announces-health-plan-limits-for-2027) [![What Happens to Your Retirement Plan When You Sell Your Business?](https://rmcgp.com/hubfs/RMC%20-%20Blog%20Header%20(1)-May-28-2026-04-06-00-2941-PM.png) ](https://rmcgp.com/blog/what-happens-to-your-retirement-plan-when-you-sell-your-business) ### [What Happens to Your Retirement Plan When You Sell Your Business?](https://rmcgp.com/blog/what-happens-to-your-retirement-plan-when-you-sell-your-business) A clear summary of your options, obligations, and next steps for protecting your retirement savings through a business sale Selling your business is one of the most significant financial events of... [Read More](https://rmcgp.com/blog/what-happens-to-your-retirement-plan-when-you-sell-your-business) 1004 Collier Center Way #206 Naples, FL 34110 ```json { "@context" : "https://schema.org", "@type" : "BlogPosting", "author" : { "@type" : "Person", "name" : "RMC Group", "url" : "https://rmcgp.com/blog/author/rmc-group" }, "dateModified" : "2026-05-04T19:51:42.507Z", "datePublished" : "2020-11-06T18:29:48.000Z", "headline" : "Maximum Pension Limits for 2021 - RMC Group", "image" : [ "https://rmcgp.com/hubfs/blog9.jpg" ], "mainEntityOfPage" : { "@id" : "https://rmcgp.com/blog/2020/11/06/maximum-pension-limits-for-2021", "@type" : "WebPage" }, "publisher" : { "@type" : "Organization", "logo" : { "@type" : "ImageObject", "url" : "https://rmcgp.com/hubfs/RMC_Group_Logo_%5BYW.BL.NA%5D.svg" }, "name" : "RMC Group" } } ```