The Internal Revenue Service (IRS) has released Notice 2021-61, containing cost-of-living adjustments for 2022 that affect amounts employees can contribute to 401(k) plans and individual retirement accounts (IRAs).
The employee contribution limit for 401(k) plans in 2022 has increased to $20,500, up from $19,500 for 2021 and 2020. Other key limit increases include the following:
The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth IRAs and claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) also increased for 2022. The IRS’ news release contains more details.
Key limits that remain unchanged include the employee contribution limit for IRAs (remaining at $6,000) and the catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan (remaining at $6,500).
Contact Witkemper Insurance Group and Financial Services with any questions about your retirement plan.