Next year taxpayers can put an extra $1,000 into their 401(k) plans. The IRS recently announced that the 2022 contribution limit for 401(k) plans will increase to $20,500. The agency also announced cost‑of‑living adjustments that may affect pension plan and other retirement-related savings next year.
Highlights of changes for 2022
The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $20,500. Limits on contributions to traditional and Roth IRAs remains unchanged at $6,000.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If neither the taxpayer nor their spouse is covered by a retirement plan at work, their full contribution to a traditional IRA is deductible. If the taxpayer or their spouse was covered by a retirement plan at work, the deduction may be reduced or phased out until it is eliminated. The amount of the deduction depends on the taxpayer’s filing status and their income.
Traditional IRA income phase-out ranges for 2022 are:
Roth IRA contributions income phase-out ranges for 2022 are:
Saver’s Credit income phase-out ranges for 2022 are:
The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022.
Traditional and Roth IRAs — A comparison chart
Publication 590-A, Contributions to Individual Retirement Arrangements
COLA Increases for Dollar Limitations on Benefits and Contributions
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