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U.S. Treasury is paying $3 billion a day in interest on national debt, says the CBO—having spent $10 billion to prop up the currency of its top lender

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Steve and Connie Ballmer are splitting their $8 billion philanthropy into three so the people closest to the work can decide how the money is spent

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Finance401(k)

IRS increases 401(k) limits for 2022

By
Chris Morris
Chris Morris
Former Contributing Writer
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By
Chris Morris
Chris Morris
Former Contributing Writer
Down Arrow Button Icon
November 5, 2021, 10:45 AM ET
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The Internal Revenue Service is setting new limits on what people can sink into their retirement savings as people begin to focus on the upcoming tax year.

Starting in 2022, the maximum amount individuals can contribute to their 401(k) will jump to $20,500—a $1,000 increase over the past two years. The new limits will also apply to 403(b) accounts, most 457 plans, and the federal government’s Thrift Savings Plan.

Roth IRA investors will see some changes, as well. The income range conditions under which taxpayers can deduct Roth IRA contributions are changing.

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

If taxpayers and their spouses aren’t covered by a retirement plan at work, then traditional IRA contributions can be deducted to a point. In each circumstance, the phaseout range hit a higher income level:

  • For single taxpayers covered by a workplace retirement plan, the phaseout range increased to $68,000–$78,000, up from $66,000–$76,000.
  • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phaseout range is increased to $109,000–$129,000, up from $105,000–$125,000.
  • For IRA contributors who are not covered by a workplace retirement plan, but are married to someone who is covered, the phaseout range is increased to $204,000–$214,000, up from $198,000–$208,000.

The limit on annual contributions to an IRA remains unchanged at $6,000.

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About the Author
By Chris MorrisFormer Contributing Writer

Chris Morris is a former contributing writer at Fortune, covering everything from general business news to the video game and theme park industries.

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