Final answer:
The answer to the student's question is that the total annual contributions to an individual participant in a traditional Section 401(k) plan for the year 2021 were limited to $19,500.D. $19,500
Step-by-step explanation:
In 2021, the total annual contributions to an individual participant in a traditional Section 401(k) plan were limited to $19,500. This cap is set by the IRS and may increase periodically to account for inflation and cost-of-living adjustments. Defined contribution plans like the 401(k) allow both employees and employers to contribute, with the funds invested in various vehicles such as stocks, bonds, and mutual funds. These plans offer tax-deferred growth, meaning taxes on investment gains are postponed until funds are withdrawn during retirement.