Before another pay check goes by, make sure to bump up your 401(k) contributions to reflect higher 2022 contribution limits.
Putting more into your 401(k) helps get you ready for retirement and cuts what you owe to the IRS (and who doesn’t like that!).
Depending on the type of plan you are offered at work, you can direct your salary deferrals to a traditional tax-deductible 401(k) or to a Roth 401(k), where there is no immediate tax deduction but your dollars grow forever free of tax.
New contribution limits
In 2022, you can contribute up to $20,500 to your 401(k).
That limit is $27,000 if you are age 50 or over in calendar year 2022.
Those limits have increased $1,000 from 2021 levels.
The new higher 2022 limits apply to 401(k), 403(b), 457, and TSP savings plans.
No change to IRAs
Sorry, there is no change to IRA contribution levels for 2022, which remain at $6,000 (under 50) and $7,000 (for the 50 and over crowd).
Want a recap of all the contribution amounts for 2022? We posted a handy chart in an earlier blog: