Citi Personal Wealth Management

Numbers You Need
to Know: 2020 and 2021

HomeFinancial GuidancePersonal Finance

Key numbers to consider as you ponder crucial goals

Below you’ll find key numbers to consider as you ponder crucial goals like saving enough for retirement and college expenses, amounts to give to charities, and planning for changes in your estate. Keep in mind that, while averages are interesting, your individual situation may differ. Indeed, as you think about goals such as how to save for your children’s college costs and how to limit this year’s tax bill, please consult a Citi Personal Wealth Management Financial Advisor, who can coordinate financial planning strategies with your tax advisor.

Figure 1: Cost of Living
Figure 1: Cost of Living
This chart shows the average cost of living for raising children, paying for education, home ownership, retirement, medical expenses and nursing home costs in the U.S.
Sources: Inflation-adjusted cost of raising a child by middle-income family from the U.S. Department of Agriculture’s “Expenditures on Children by Families” 2015 report (released January 2017). College costs are calculated by the College Board based on 2020-2021 academic year. National median existing-home price is from the National Association of Realtors (Q4 2020). Amount needed to cover retirement medical costs (excluding nursing-home expenses) for 65 year-old couple retiring in 2020 (source: Fidelity Investments). Nursing-home cost is the national median rate for a single year in a private room and comes from Genworth’s 2020 study.
Figure 2. Family Financial Snapshot
Figure 2. Family Financial Snapshot
This chart indicates the percentages of U.S. families who have retirement accounts, own homes and vehicles, have debt with credit card balances, mortgages or other home-secured debt.
Sources: Percentage of families holding different assets and liabilities from Federal Reserve’s 2019 Survey of Consumer Finances.
Figure 3: Taxes
2021 2020
Earnings subject to Social Security payroll tax: $142,800 $137,700
Maximum federal income-tax rate of 37% and
20% maximum long-term capital-gains rate if
income above:
$628,300 if married filing jointly
$523,600 if single
$622,050 if married filing jointly
$518,400 if single
3.8% Medicare surtax applies to net
investment income if total income above:
$250,000 if married filing jointly
$200,000 if single
$250,000 if married filing jointly
$200,000 if single
Standard deduction:1 $25,100 if married filing jointly
$12,550 if single
$24,800 if married filing jointly
$12,400 if single
Personal exemption: None None
Gift tax exclusion: $15,000 $15,000
Estate tax exclusion: $11.7 million $11.58 million
❮ Swipe left for more
This table compares some key U.S. Federal Income Tax numbers between 2020 and 2021, from payroll taxes and income tax rates to gift and estate tax exclusions.
Sources: IRS and Social Security Administration.
1. No curtailing of itemized deductions if single or married.
Figure 4: Retirement
2021 2020
Traditional and Roth IRA contribution limit.1 $6,000 ($7,000 if age 50 or older) $6,000 ($7,000 if age 50 or older)
If covered by retirement plan at work,
traditional IRA deduction phases out at:
$105,000 to $125,000 if
married filing jointly
$66,000 to $76,000 if single
$104,000 to $124,000 if
married filing jointly
$65,000 to $75,000 if single
If spouse covered by retirement plan but you,
aren't, your IRA deducation phases out at:
$198,000 to $208,000 in joint income $196,000 to $206,000 in joint income
Eligibility to fund a Roth IRA phases
out at these incomes:
$198,000 to $208,000 if
married filing jointly
$125,000 to $140,000 if single
$196,000 to $206,000 if
married filing jointly
$124,000 to $139,000 if single
401(k) contribution limit: $19,500 ($26,000 if age 50 or older) $19,500 ($26,000 if age 50 or older)
SIMPLE IRA contribution limit: $13,500 ($16,500 if age 50 or older) $13,500 ($16,500 if age 50 or older)
SEP IRA contribution limit:2 25% of annual compensation, up to $58,000 25% of annual compensation, up to $57,000
❮ Swipe left for more
This table compares retirement related U.S. Federal Income Tax numbers between 2020 and 2021, from IRA contribution limits to deduction phase out dollar amounts based upon various scenarios.
Sources: IRS and Social Security Administration.
1 There are no income eligibility limits for contributions to a Traditional IRA. But if you or your spouse are covered by a workplace retirement plan, income limits apply for deducting annual contributions. With a Roth IRA, various income eligibility limits apply. Please see the IRS website for current information: irs.gov/retirement-plans/traditional-and-roth-iras.
2 The employer makes contributions to a SEP IRA for employees. Contribution limits listed in the table are for the employer. Employee contributions are not permitted.
Figure 5: College
2021 2020
UGMA/UTMA account: Up to $15,000 without worrying about gift tax Up to $15,000 without worrying about gift tax
Kiddie tax on unearned income: First $1,100 covered by child’s exemption First $1,100 covered by child’s exemption
529 college savings plans: Can contribute $75,0001 and count it as your gift for next five years ($150,000 per married couple) Can contribute $75,0001 and count it as your gift for next five years ($150,000 per married couple)
Coverdell education savings account:
Eligibility to contribute phases
out at these incomes
$2,000 maximum contribution
$190,000 to $220,000 if
married filing jointly
$95,000 to $110,000 if single
$2,000 maximum contribution
$190,000 to $220,000 if
married filing jointly
$95,000 to $110,000 if single
Hope Scholarship/American Opportunity Credit:
Phases out at these incomes:
$2,500 maximum per student
Phaseout begins at $160,000 if married filing jointly
Phaseout begins at $80,000 if single
$2,500 maximum per student
Phaseout begins at $160,000 if married filing jointly
Phaseout begins at $80,000 if single
Lifetime Learning Credit:
Phases out at these incomes:
$2,000 maximum
Phaseout begins at $119,000 if married filing jointly
Phaseout begins at $59,000 if single
$2,000 maximum
Phaseout begins at $119,000 if married filing jointly
Phaseout begins at $59,000 if single
Education loan interest deduction:
Phases out at these incomes:
$2,000 maximum
$140,000 to $170,000 if married filing jointly
$70,000 to $85,000 if single
$2,000 maximum
$140,000 to $170,000 if married filing jointly
$70,000 to $85,000 if single
❮ Swipe left for more
This table compares college expense related U.S. Federal Income Tax numbers between 2020 and 2021, from UGMA/UTMA accounts, 529 plans and Coverdell savings accounts to Lifetime Learning Credits and education loan interest deductions.
Sources: IRS and Social Security Administration.
1 Five times gift-tax exclusion. Consult a tax advisor for important considerations regarding the five times gift-tax exclusion.