2022 Contribution limits for IRAs and 401(k)s

2022 Contribution limits for IRAs and 401(k)s

2020 401(k) limits, 2020 IRA contribution limits

The IRS has just announced the 2022 cost-of-living adjustments made to contribution limits and income thresholds for retirement plans. This year, cost-of-living index increases were high enough to trigger adjustments to most retirement-related IRS contribution and income amounts for 2022. The only key amounts that remain the same from 2021 are contribution limits for IRAs and catch-up contribution amounts for IRAs held by those over age 50. 

401(k) contribution changes for 2022

  • 2022 contribution limits for employee 401(k) plans will increase by $1,000 to $20,500.
  • 2022 catch-up contribution limits for 401(k) participants aged 50 and older remain at $6,500.

Traditional IRA contribution changes for 2022

  • The annual contribution cap for individual retirement accounts (IRA) is unchanged from 2021 at $6,000 per eligible individual.
  • Catch-up contributions for those 50 and over remain capped at an additional $1,000 ($7,000 total contribution).
  • The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) from $68,000 to $78,000 (up from 2021's $66,000 to $76,000).
  • For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out increases by $4,000 to a range of $109,000 to $129,000. 
  • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s income ranges from $204,000 to $214,000 (up from $198,000 to $208,000 in 2021).
  • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Roth IRA contribution changes for 2022

  • For married couples filing jointly, the income phase-out range for taxpayers contributing to a Roth IRA is increasing by $6,000 to an AGI of $204,000 to $214,000.
  • For singles and heads of household, the Roth IRA income phase-out range is increased to an AGI of $129,000 to $144,000.
  • For a married individual filing a separate return, the Roth IRA phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000

 Summary of 2022 contribution limits and income thresholds vs 2021

      2021 2022
Individual Retirement Accounts (IRAs)                                                       
IRA Contribution Limit $6,000 $6,000
IRA Catch-Up Contributions 1,000 1,000
 
IRA AGI Deduction Phase-out Starting at 
   
Joint Return $105,000 $109,000
Single or Head of Household 66,000 68,000
 
SEP
 

 
 
SEP Minimum Compensation $650 $650
SEP Maximum Contribution 58,000 61,000
SEP Maximum Compensation 290,000 305,000
 
SIMPLE Plans 
   
SIMPLE Maximum Contributions $13,500 $14,000
Catch-up Contributions 3,000 3,000
 
401(k), 403(b), Profit-Sharing Plans, etc.     
 
 
 
 
Annual Compensation  $290,000 $305,000
Elective Deferrals 19,500 20,500
Catch-up Contributions 6,500 6,500
Defined Contribution Limits 64,500 67,500
ESOP Limits 1,165,000 1,230,000
 
Other
 
 
 
 
HCE Threshold $130,000 $135,000
Defined Benefit Limits 230,000 245,000
Key Employee 185,000 200,000
457 Elective Deferrals 19,500 20,500
Control Employee (board member or officer) 115,000 120,000
Control Employee (compensation-based) 235,000 245,000
Social Security Taxable Wage Limit 142,800 147,000

 

While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.



 

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