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The IRS Increases 2021 Contribution Limits to SEP IRAs and Solo 401(k)s for Business Owners

October 30, 2020

Mat Sorensen
The IRS increased 2021 contribution limits for self-employed persons who contribute to a SEP IRA or Solo 401(k) from $57,000 to $58,000. For those 50 or older, there is also a $6,500 catch-up contribution amount allowing total contributions in 2021 of $64,500. The SEP IRA and the Solo 401(k) have become a popular savings tool for self-employed persons who don’t have an employer 401(k) plan, as they allow them to contribute more than the annual $6,000 contribution that is allowed in a Traditional IRA or Roth IRA. Solo 401(k)s and SEP IRAs are also easier to administer than pension plans, and standard 401(k)s and have proven to be an optimal fit for self-employed persons who do not have full-time employees other than themselves, partners, and family…

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Mat Sorensen

Mat Sorensen

Mat has been at the forefront of the self-directed IRA industry since 2006. He is the CEO of Directed IRA & Directed Trust Company where they handle all types of self-directed retirement accounts, which are typically invested into real estate, private company/private equity, IRA/LLCs, notes, precious metals, and cryptocurrency. Mat is also a partner at KKOS Lawyers. He is published regularly on retirement, tax, and business topics, and is a VIP Contributor at Entrepreneur.com. Mat is the best-selling author of The Self-Directed IRA Handbook, the most widely used book in the self-directed IRA industry.