By: Jeffrey Dixon, MBA, CISP, SDIP
Get ready for retirement by contributing to your retirement account! Take a minute to write a check to your IRA and invest in your future. You may even get a tax deduction!
The IRS recently released the new contribution limits for 2022:
- The elective deferral for a 401k has been raised to $20,500, up from $19,500. The catch-up amount remains at $6,500 if over the age of 50.
- For a SEP IRA, the amount has been raised to $61,000, up from $58,000 or 25% of business income, whichever is less.
- For a SIMPLE IRA, the amount has been raised to $14,000, up from $13,500. The catch-up amount remains at $3,000 if over the age of 50.
- Traditional and Roth contributions stay the same at $6,000. The catch-up amount remains at $1,000 if over the age of 50.
A non-working spouse can make a Traditional or Roth contribution if their spouse has qualifying income from a W-2 job or self-employment.
The adjusted gross income limitation for determining the maximum Roth IRA contribution for married taxpayers filing a joint return or for taxpayers filing as a qualifying widow(er) is increased from $198,000 to $204,000. The adjusted gross income limitation for all other taxpayers (other than married taxpayers filing separate returns) is increased from $125,000 to $129,000.
The adjusted gross income phase-out range for taxpayers making contributions to a Roth IRA is $204,000 to $214,000 for married couples filing jointly, increased from $198,000 to $208,000. For singles and heads of household, the income phase-out range is $129,000 to $144,000, increased from $125,000 to $140,000. For a married individual filing a separate return, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.
Retirement savings grow tax-free or tax deferred and as a result, your retirement savings can compound faster since they are not diminished by tax. Be your own best friend and put something away for your retirement years today.
Read more about the changes HERE
Retirement plans remain a great way to plan for your future. If you have questions about the 2022 contribution limits or any other retirement plan issue, please contact us at 866-919-1236 or email us at info@uDirectIRA.com.
