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Good News: 401(k) Contribution Limits Are Rising In 2022

Good News: 401(k) Contribution Limits Are Rising In 2022

November 05, 2021

The IRS has just announced that 401(k) contributions have increased for 2022:
From $19,500 to $20,500
And for those age 50 and over, from $26,000 to $27,000 with the catch-up.

This higher contribution amount may come as good news for those trying to add as much as they can into their 401k accounts.

IRA & Roth IRA contribution amounts did not increase, but we now have slightly high phase outs (hey, something is better than nothing right?)

The income phase-out range for taxpayers making contributions to a Roth IRA is increased to $129,000 to $144,000 for singles and heads of household, up from $125,000 to $140,000. For married couples filing jointly, the income phase-out range is increased to $204,000 to $214,000, up from $198,000 to $208,000. 

If you, or other employees, are trying to max out your contributions, I suggest that you contact your payroll provider or HR and verify if you need to manually make the updated. Some systems may not automatically increase the contributions. 

Note: Key employee contribution limits have remain unchanged. So if there are top-heavy issues with you plan, continue to keep an eye on ADP/ACP testing.

Although not everyone has the means to make a full contribution, this bump is helpful for those who are in that position.

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Here is further explanation from a Forbes article by Julie Jason, JD, LLM, Contributor posted on Nov. 5, 2021.


If you “love” your 401(k) plan at work, you’ll be pleased with today’s IRS announcement about contribution limits . The amount that you can contribute to your 401(k) will be higher in 2022, increasing to $20,500 from 2021’s limit of $19,500.

The amount a person can contribute to a 401(k) in 2022 has increased to $20,500./Getty Images

This new limit also applies to 403(b) plans, most 457 plans and Thrift Savings Plans. The IRS defines 403(b) plans as being for “certain employees of public schools, employees of certain Code Section 501(c)(3) tax-exempt organizations and certain ministers,” while 457 plans are deferred-compensation retirement plans available for government and non-government employers.

Thrift Savings Plans are retirement and savings plans for federal employees and those in the uniformed services.

Catching Up On Contributions

Note that people who are age 50 and up can contribute a “catch-up contribution” to the retirement plans listed above in 2022 of $6,500, which has not increased from 2021.

By adding the overall increase to the catch-up contribution, a 50-year-old (or older) participant can contribute up to $27,000 in 2022.

More details can be found in Notice 2021-61 , which is available at

The Best 401(k) Savers

Who loves his or her 401(k)? People who take full advantage of their company’s 401(k) plan to save for retirement, which includes contributing enough to receive the company’s full matching contributions. They also are willing to share with others the advantages of saving as much as they can for retirement as early as they can, to take advantage of the compounding effect of time.

By Julie Jason, JD, LLM, Contributor

© 2020 Forbes Media LLC. All Rights Reserved

This Forbes article was legally licensed through AdvisorStream.