The maximum tax-deductible retirement contribution for the year varies depending on the type of retirement account and the age of the account holder.
For 2021, the maximum contribution limit for an individual retirement account (IRA) is $6,000, with an additional $1,000 catch-up contribution for individuals aged 50 and older. For a 401(k), 403(b), or most 457 plans, the contribution limit is $19,500 for 2021, with an additional $6,500 catch-up contribution for individuals aged 50 and older. SEP-IRAs and solo 401(k)s have higher contribution limits, but they are based on the self-employed individual's income and other factors.
It is important to note that these limits can change from year to year and that there may be exceptions or limitations to these contribution limits that depend on your specific situation. For example, high-income earners may be subject to additional contribution limits or phase-out limits for certain retirement accounts. Additionally, some retirement plans may have employer contributions that count towards the overall contribution limit.
If you are unsure about your contribution limits or have questions about specific retirement accounts, it is recommended to speak with a financial advisor or a tax professional. They can review your particular situation and provide tailored recommendations for your retirement planning.
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