The 401(k) and IRA Maximum Contribution Limits for 2021

The 401(k) and IRA Maximum Contribution Limits for 2021

There are several tax benefits associated with saving in an IRA or 401(k). With a traditional IRA or 401(k), your contributions go in tax-free, thereby exempting a portion of your income from taxes. Traditional IRAs and 401(k)s also allow for tax-deferred investment growth, which means that when your investments in your account earn money, you're not taxed on those gains year after year like you are in a regular brokerage account.