IRS ANNOUNCES INCREASE IN 2022 RETIREMENT ACCOUNT CONTRIBUTIONS

The IRS recently announced an increase in retirement account contributions, allowing savers to put away extra money in 2022. This announcement was made public in a release about cost-of-living adjustments for retirement plans next year. The contribution limit for workplace retirement accounts is being increased from $19,500 to $20,500, and includes?401(k)s, 403(b)s, & some 457 plans and thrift savings plans.?Although retirement contributions are changing, catch-up contributions are staying the same; Savers aged 50 and older can contribute an additional $6,500, allowing their total contribution to now be $27,000.

The amount people can contribute to?Individual Retirement Accounts (IRAs)?is staying the same at $6,000 a year. The catch-up contribution amount for IRAs is not subject to an annual cost-of-living adjustment, and will stay at $1,000 allowing those aged 50 or older to contribute $7,000 next year. The Contribution limit for?SIMPLE IRAs?has also increased for 2022, jumping from $13,500 to $14,000. The catch-up contribution for those aged 50 and older remains unchanged at $3,000.

Income ranges to be eligible to contribute to ROTH IRAs are increasing in 2022. The new income phase outs are between $129,000 & $144,000 for singles and head of households (previously $125,000 to $140,000), and $204,000 to $214,000 for married couples filing jointly (previously $198,000 to $208,000).

If you'd like more information on the 2022 cost-of-living adjustments for retirement accounts, see the?IRS Publication