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Some Changes for Retirement Savers in 2021

By LouAnn Schulfer, AWMA®, AIF®
Accredited Wealth Management AdvisorSM
Accredited Investment Fiduciary®
If you are a retirement saver, much remains the same in 2021 as it was for 2020.

If you participate in a 401(k), you are allowed to defer up to $19,500 of your salary if you are under 50 and up to $26,000 if you are 50 or over. Many employers offer matching contributions, sweetening the deal of saving for your future even more.

Contributions to Individual Retirement Accounts (IRA’s) remain the same as 2020, at $6,000 for those under 50 and $7,000 for those 50 and over. For traditional IRA’s, you are allowed to deduct your contribution amount from your taxable income, and for ROTH IRA’s, the contributions are made with after-tax dollars, both being subject to income threshold limits (which have also risen slightly for 2021) depending on your tax filing status (single, married filing joint, etc.).

There are other rules to remember when making IRA contributions. You must have earned income, and if that earned income is less than the maximum allowable contributions, that is your limit. Earned income is different than taxable income. You may have taxable income from IRA distributions, for example if you have inherited an IRA subject to required distributions. That distribution is taxable but not counted as earned income. You are now allowed to make traditional IRA contributions at any age (that changed late in 2019 for the 2020 tax year and beyond). ROTH IRA contributions are also allowed at any age. For both IRA and  ROTH IRAs, you must meet the requirements of earned income while staying under the maximum income thresholds that allow contributions.

Be sure you are familiar with the rules for contributions.  If you violate the IRS mandates you will be subject to penalties. Consult with a qualified advisor. You may also visit .

LouAnn Schulfer is co-owner of Schulfer & Associates, LLC Wealth Management and can be reached at (715) 343-9600 or

Securities and advisory services offered through LPL Financial, a Registered Investment Advisor.  Member FINRA/SIPC.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.