With the price of principally all the pieces going up proper now, this must be welcome news for individuals who have retirement accounts.
The Inner Income Service (IRS) on Thursday introduced new contribution limits for 401(ok) plans in 2022, together with up to date steering concerning price of dwelling changes (CODA) that have an effect on numerous different retirement-related plans.
Right here’s a rundown of what’s new:
- 401(ok) plans: People will have the ability to contribute as much as $20,500 in 2020, a rise of $1,000 from $19,500 this 12 months.
- 403(b), 457 plans: Ditto for many of those plans. The contribution restrict goes as much as $20,500 in 2022.
- IRAs: The earnings vary that determines if you happen to’re eligible to make deductible contributions to your Particular person Retirement Preparations will improve. For a full checklist of particular “phase-out” ranges, go to the IRS announcement here.
- Roth IRAs: The earnings vary for contributing to your Roth IRA or the Saver’s Credit score can be going up. Full list of phase-out ranges here.
- SIMPLE retirement accounts: The contribution restrict for these accounts is rising to $14,000 in 2020, up from $13,500.
What hasn’t modified:
- In accordance with the IRS, annual contributions to IRA stay capped at $6,000.
- Ditto for the “catch-up” contribution restrict for folks 50 and older, which stays unchanged at $1,000.
- 401(ok), 403(b), most 457 plans: The catch-up contribution limits for these kind of accounts will not be altering.
To study extra about these adjustments intimately, try the IRS Notice 2021-61.