2022 IRS Retirement Plan Limits
2021 was another rollercoaster ride, and I think many of us are looking forward to what the new year will bring! As the year winds down, it’s a great time to reassess our financial situation and planning considerations. Every calendar year, the IRS adjusts contribution limits for retirement plans to account for inflation. As we look ahead, we again have some changes for 2022 retirement plan contributions.
Here are some of the more notable changes for 2022:
2022 Retirement Plan Limits for 401(k)/403(b)
Let’s start off with the most common plans. The limit is for 401(k) and 403(b) plans is $20,500 for 2022, up from $19,500 last year. If you are age 50 or older, you also are allowed a “catch up” contribution to encourage additional savings, which remains the same this year at $6,500 as well, for a total maximum contribution of $27,000.
The other adjustment is to total contributions. The adjustment to the TOTAL limit for these plans has increased from $58,000 in 2021 to $61,000 in 2022. These amounts include employer contributions, after-tax contributions, etc., and is the absolute max that can be contributed to these plans in a given year.
2022 Retirement Plan Limits for Traditional IRAs and Roth IRAs
Just like the last few years, the IRS did not make any changes to the contribution limits for IRAs or Roth IRAs for 2022. The limit remains the same at $6,000 for the year, with an additional $1,000 “catch-up” contribution available to those 50 and older. Please keep in mind that IRAs and Roth IRAs have income considerations, which have slightly increased for 2022, so be sure to review these income thresholds before making contributions.
2022 Retirement Plan Limits for HSAs
HSA savings account limits have increased again for 2022. Similar to last year, the family plan maximum contributions are up $100 in 2022 for a total of $7,300. Individuals also increased by another $50 to a level of $3,650 for 2022.
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2022 Retirement Plan Limits for SEP IRAs
Business owners and self-employed individuals will be able to save a bit more this year as well. The maximum contribution to a SEP IRA increases to $61,000 in 2022, up from $58,000 in 2021. This maximum is subject to a percentage of income calculation as well.
2022 Retirement Plan Limits for SIMPLE IRA Plans
Employees with a SIMPLE IRA plan (typically used in smaller groups) will see an increase of $500 in 2022. The SIMPLE maximum contribution will now be $14,000 in 2022. SIMPLE IRA participants over age 50 are also eligible to save an additional $3,000 “catch-up” contribution, which remains the same this year.
There are slight differences in 2022 for retirement contribution limits, so be sure to adjust your savings to take full advantage of your retirement accounts. Hopefully, 2022 is your best year yet, and we can all get back to a normal life after the challenges of the past couple of years.
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