In Case You Blinked
In case you blinked, 2021 is almost over and 2022 is less than a month away.
If you are planning on maximizing your retirement plan contributions again next year or for the first time, there are some cost of living increases that will go in effect. Be sure to increase your contribution level accordingly.
- 401(k) and 403(b) plans have increased from $19,500 of annual deferrals to $20,500, with an age 50+ catch up remaining unchanged at $6,500. The total plan limit has increased to from $58,000 to $61,000, not including the $50+ catch up.
- 457(b) plan limits also increased to $20,500.
- SEP IRA contributions increased from $58,000 to $61,000, subject to 25% compensation.
- SIMPLE IRA plan deferrals have increased from $13,500 to $14,000, with the age 55+ catch up contribution remaining the same. If you happen to have a somewhat rare SIMPLE 401(k) plan, this limit applies as well.
- Health Savings Account contributions have increased to $3,650 from $3,600 for those with individual health coverage. Likewise, the limit for those with family health coverage has increased from $7,100 to $7,200. The age 55+ catch up remains $1,000.
- Flexible Spending Accounts s increased from $2,750 to $2,850.
- While employer sponsored plan contribution limits have increased, the aggregate limit to Traditional IRA and Roth IRAs remains at $6,000, with a $1,000 age 50+ catch up.
- Though IRA contribution limits have remained static, there are increased phase outs.
- The Roth eligibility phase out limits will be $129,000-$144,000 for single filers and $204,000-$214,000 if married filing jointly.
- The deductibility traditional IRA contributions will phase out from $68,000-$78,000 for single filers and $129,000-$144,000 if married filing jointly.
Thanks for checking out the blog.
Schuyler Engelhardt , CFP®