New Retirement Plan Limitations Announced by the IRS for 2022
On November 4, 2021, the IRS release IRS Notice 2021-61, providing for the new cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for the 2022 Tax Year. Changes to the limits are based upon the Social Security cost-of-living increases. Unlike last year, as a result of higher inflation many of the applicable pension and retirement limitations are rising significantly from the rates in place for the 2021 Tax Year.
Below are the new 2022 plan limitations:
2022 Retirement Plan Limits
|
|
2022 |
2021 |
2020 |
|
401(k),403(b) and 457(b) Deferral Limits |
$20,500 |
$19,500 |
$19,500 |
|
401(k) and 403(b) Catch-up Deferral Limits |
$6,500 |
$6,500 |
$6,500 |
|
Annual Limitation on Compensation |
$305,000 |
$290,000 |
$285,000 |
|
Defined Contribution Limitation |
$61,000 |
$58,000 |
$57,000 |
|
Defined Benefit Limitation |
$245,000 |
$230,000 |
$230,000 |
|
Highly Compensated Employee Compensation Threshold |
$135,000 |
$130,000 |
$130,000 |
|
Key Employee Compensation - Officer Threshold |
$200,000 |
$185,000 |
$185,000 |
|
SIMPLE Deduction |
$14,000 |
$13,500 |
$13,500 |
|
SIMPLE Catch-Up Contribution |
$3,000 |
$3,000 |
$3,000 |
|
IRA Contribution Limit |
$6,000 |
$6,000 |
$6,000 |
|
IRA Catch-Up Contribution Limit |
$1,000 |
$1,000 |
$1,000 |
|
Social Security Wage Base |
$147,000 |
$142,800 |
$137,700 |
Employee Benefits
Benefit programs should be a win-win for employers and employees. We strive to accomplish that goal in the design, implementation and operation of sophisticated benefit and executive compensation programs – qualified and non-qualified retirement programs and health and welfare plans. Our employee benefits team has a long track record of working to maximize the efficiency and economic feasibility of each program.
If you have any questions or would like more information, please contact one of the attorneys below.
