Retirement Contribution Limits and Income Restrictions for 2022


January 27, 2022

2:26 min

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The Internal Revenue Service (IRS) announced changes to retirement plans for 2022 – here’s what to know about the contribution and income limits.

2022 Retirement Contribution limits

The IRS reports the 2022 contribution limit for 401(k) plans, 403(b), most 457 plans, and the federal government's Thrift Savings Plan will increase to $20,500. If you’re ages 50 and older, you can add $6,500 per year in catch-up contributions. Limits on contributions to traditional and Roth IRAs remain unchanged at $6,000. In addition, the IRS announced cost-of-living adjustments which may affect pension plan and retirement-related savings for 2022.

Tax Deduction Limits and Income Limits for IRA Contributions

If you’re contributing to a retirement savings plan through your employer, like a 401(k), you can add funds to a traditional IRA. While these aren’t subject to income limits, there are restrictions on what you’re able to deduct from your taxes based on income and filing status. According to the IRS, here are the income ranges for the year 2022.

Traditional IRA Income Phase-Out Ranges for 2022:

  • $68,000 to $78,000 – Single taxpayers covered by a workplace retirement plan
  • $109,000 to $129,000 – Married couples filing jointly. This applies when the spouse making the IRA contribution is covered by a workplace retirement plan.
  • $204,000 to $214,000 – A taxpayer not covered by a workplace retirement plan married to someone who's covered.
  • $0 to $10,000 – Married filing a separate return. This applies to taxpayers covered by a workplace retirement plan.

Roth IRA Contributions Income Phase-Out Ranges for 2022:

  • $129,000 to $144,000 – Single taxpayers and heads of household
  • $204,000 to $214,000 – Married, filing jointly
  • $0 to $10,000 – Married, filing separately

Saver's Credit Income Phase-Out Ranges for 2022:

  • $41,000 to $68,000 – Married, filing jointly.
  • $30,750 to $51,000 – Head of household.
  • $20,500 to $34,000 – Singles and married individuals filing separately.

The amount individuals can contribute to SIMPLE retirement accounts also increases to $14,000 in 2022. For more information on these limits, visit the IRS website on 2022 retirement plan changes.

Increased 2022 HSA Contribution Limits

A Health Savings Account (HSA) is a taxed-advantaged account you can use to pay for qualified medical expenses. HSAs can help pay for high-deductible medical expenses your insurance plan may not cover, so consider contributing pre-tax dollars in your HSA after maxing out your 401(k). You may have heard HSAs have triple tax advantage: the money you contribute isn’t taxed, the funds grow tax-free, and you’re not taxed when you use the funds to pay for qualified medical expenses. The funds in an HSA rollover from year to year, which can help pay for health-related expenses in retirement. Here are the HSA contribution limits for 2022.

  • Self-coverage: $3,650
  • Family coverage: $7,300

As always, we’re here to help make the investing process as easy as possible. If there’s anything we can help you with, don’t hesitate to contact us.

Neither LPL Financial, nor its registered representatives, offer tax or legal advice. Always consult a qualified tax advisor for information as to how taxes may affect your particular situation.

Category: Retirement

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