If saving more for retirement is one of your clients’ New Year’s resolutions for 2022, the table and links below will help plan for the 2022 contributions and help get your clients closer to meeting retirement-savings resolutions.
The Internal Revenue Service (IRS) has announced the 2022 cost-of-living adjustment (COLA) increases to contribution limits for Individual Retirement Accounts (IRAs) and qualified plans.
Each year, the IRS adjusts these numbers for cost-of-living increases in $500 increments when statutory thresholds are met. Although there were no changes to traditional and Roth IRAs, there was an increase for defined contribution limits with employer plans. In addition, the life expectancy tables used to calculate required minimum distributions (RMDs) also have been updated.
While discussing maximum contributions with clients for traditional or Roth IRAs, it’s important to understand the deductible IRA and Roth IRA phaseout ranges to avoid the 6% excess contributions penalty. The table below may help with planning contributions for 2022.