Business Account Contribution Limits:
Individual Account Contribution Limits:
Contribution Limits for 2022
Current 401K contributions for 2021 are maxed out at $19,500 for savers under the age of 50, and max at $26,000 for savers over 50. The reason for the higher limit for those over 50 is what’s called a catch-up contribution. The IRS has set rules for catch-up contributions, learn more here.
For 2022 however, the contribution limit has been raised to an annual limit of $20,500, and $27,000 for savers over the age of 50.
One benefit for savers who max out their 401K contributions in 2022 is the expected tax savings. Contributions to 401Ks are made with pre-tax money, so the more that’s contributed, the more that the account holder saves. The extra $1,000 can make a big difference for those in a higher tax bracket.
Contribution limits for self-directed IRAs largely remain the same for 2022 as they were for 2021. As of 2021 and now through 2022, annual contribution limits are at $6,000 for savers under 50, and an annual contribution of $7,000 for those 50 or over.
It’s important to note that these limits apply across all IRA accounts, so if you’re contributing to multiple accounts, that $6,000-$7,000 limit will apply across all accounts.
Here are the traditional IRA phase-out ranges for 2021:
- $68,000 to $78,000 – Single taxpayers covered by a workplace retirement plan
- $109,000 to $129,000 – Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan.
- $204,000 to $214,000 – A taxpayer not covered by a workplace retirement plan married to someone who’s covered.
- $0 to $10,000 – Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan.
Here are the income phase-out ranges for taxpayers making contributions to a Roth IRA:
- $129,000 to $144,000 – Single taxpayers and heads of household
- $204,000 to $214,000- Married, filing jointly
- $0 to $10,000 – Married, filing separately
Each year, the IRS assesses contribution limits for pension plans and retirement saving accounts to accommodate for cost of living adjustments. Last year, the IRS made no significant adjustments to either 401K or IRA contribution limits.
Saver’s Credit income phase-out ranges for 2022 are:
- $41,000 to $68,000 – Married, filing jointly.
- $30,750 to $51,000 – Head of household.
- $20,500 to $34,000 – Singles and married individuals filing separately.
The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022.