The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans increased by $1,000, to $20,500. Limits on contributions to traditional and Roth IRAs, however, remain unchanged for 2022, at $6,000. The amount individuals can contribute to SIMPLE retirement accounts has also increased to $14,000 in 2022.
The IRS also announced that for those taxpayers who have been deducting their traditional IRA contributions, this may no longer be the case going forward, unless you or your spouse are not covered by another retirement plan at your place of employment. Otherwise, the deduction will be phased out in 2022 if:
For those making Roth IRA contributions, the IRS has phased out the following deductions for 2022:
The agency also announced cost‑of‑living adjustments that may affect pension plan and other retirement-related savings next year.
For more information, ask the experts at Isakov Planning Group. We can help review your individual retirement savings strategy. We can also set up a 401(k) program that works best for you.