Retirement Account Inflation Adjustments for 2022:
Qualified Accounts
2022 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $19,500 to $20,500. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution which will remain at $6,500 a year.
2021
2022
Under Age 50 Contribution Limit
–
–
$19,500
$20,500
Over Age 50 Contribution Limit
–
–
$26,000
$27,000
The 2022 contribution limits for an IRA or Roth IRA have stayed unchanged at $6,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2022 Traditional IRA AGI Limits:
Single or Head of Household: $68,000 – $78,000
Married Filing Jointly (and you’re covered by a retirement plan at work) $109,000 -$129,000
Married Filing Jointly (and your spouse is covered by a retirement plan at work) $204,000 -$214,000
Married Filing Separately: $0 – $10,000
2022 Roth IRA AGI limits:
Single or Head of Household: $129,000 – $144,000
Married Filing Jointly: $204,000 – $214,000
Married Filing Separately: $0 – $10,000
2022 SIMPLE IRA Contribution limits:
The maximum deferral has increased from $58,000 to $61,000
The minimum compensation amount remains at $650
Defined Contribution Plans –
The 2022 defined contribution plan funding has increased from $58,000 to $61,000.
Defined Benefit Plans –
The 2022 limitation on the annual benefit has increased from $230,000 to $245,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2022, a single taxpayer can contribute $3,650 and family coverage is $7,300. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
DISCLOSURES
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
< COMMENTARY
Updates | November 09, 2021
2022 Tax Updates
By Kenneth J. Dean CPA, CFP®, CFA, MST
Senior Director, Financial Planning
Retirement Account Inflation Adjustments for 2022:
Qualified Accounts
2022 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $19,500 to $20,500. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution which will remain at $6,500 a year.
The 2022 contribution limits for an IRA or Roth IRA have stayed unchanged at $6,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2022 Traditional IRA AGI Limits:
2022 Roth IRA AGI limits:
2022 SIMPLE IRA Contribution limits:
Defined Contribution Plans –
The 2022 defined contribution plan funding has increased from $58,000 to $61,000.
Defined Benefit Plans –
The 2022 limitation on the annual benefit has increased from $230,000 to $245,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2022, a single taxpayer can contribute $3,650 and family coverage is $7,300. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
DISCLOSURES
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.