Retirement Contributions Limits Announced for 2022

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Retirement Contributions Limits Announced for 2022

The Internal Revenue Service announced the annual retirement contributions limits and benefits for the year 2022. The annual limits are annually revised based on cost-of-living adjustments.

 

401(k), 403(b), 457 plans, and Thrift Savings Plan

Employees who participate in a 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan can contribute up to $20,500 this year toward their retirement savings. The catch-up contribution limit for people aged 50+ remains unchanged at $6,500.

 

SIMPLE Retirement Accounts

The contribution limit increases from $13,500 to $14,000 for SIMPLE retirement accounts. The catch-up contribution limit for employees aged 50 and over remains at $3,000.

 

Traditional IRAs

The max annual contribution to an IRA remains at $6,000. The additional catch-up contribution limit for individuals aged 50 and over does not change and remains $1,000.

If you contribute to a traditional, deductible IRA, you may be able to deduct your contribution if you meet certain conditions; however, if during the year either the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced until it is eliminated. If a retirement plan at work covers neither the taxpayer nor their spouse, the phase-out amounts of the deduction do not apply.

The phase-out ranges for 2022 are as follows:

  • For single taxpayers covered by a workplace retirement plan, the phase-out range is $68,000 and $78,000, up from $66,000 and $76,000.
  • For married couples filing jointly, where a workplace retirement plan covers the spouse making the IRA contribution, the phase-out range is $109,000 and $129,000, up from $105,000 and $125,000.
  • 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 is between $204,000 and $214,000, up from $198,000 and $208,000.
  • 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 IRAs

The income phase-out range for taxpayers making contributions to a Roth IRA is $129,000 to $144,000 for singles and heads of household, up from $125,000 to $140,000. For married couples filing jointly, the income phase-out range is $204,000 to $214,000, up from $198,000 to $208,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

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