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Posted by jflorian on Nov 9, 2021

Save More for Retirement in 2022

On November 4, 2021, the IRS announced the Cost of Living Adjustments affecting the dollar limitations for retirement plans for 2022. In October, the Social Security Administration announced a benefit increase of 5.9%, the largest increase in nearly 40 years. Following suit, many retirement plan limits have increased as well over the 2021 levels. Contribution and benefit increases are intended to allow participant contributions and benefits to keep up with the "cost of living" from year to year. Here are the highlights from the 2022 limits:

Annual Plan Limits
Contribution and Benefit Limits
Elective Deferral Limit $20,500 $19,500 $19,500
Catch-Up Contributions $6,500 $6,500 $6,500
Annual Contribution Limit $61,000 $58,000 $57,000
Annual Contribution Limit including Catch-Up Contributions $67,500 $64,500 $63,500
Annual Defined Benefit Limit $245,000 $230,000 $230,000
Compensation Limits
Maximum Plan Compensation $305,000 $290,000 $285,000
Income Subject to Social Security $147,000 $142,800 $137,700
Key EE Compensation Threshold $200,000 $185,000 $185,000
Highly Compensated EE Threshold $135,000 $130,000 $130,000
IRA Limits
SIMPLE Plan Elective Deferrals $14,000 $13,500 $13,500
SIMPLE Catch-Up Contributions $3,000 $3,000 $3,000
Individual Retirement Account (IRA) $6,000 $6,000 $6,000
IRA Catch-Up Contribution $1,000 $1,000 $1,000

If you have any questions on how these increases will affect your plan, please contact your representative. ■

  • Form 5500 Filing Extension for FEMA Designated Disaster Areas
  • Upcoming Compliance Deadlines for Calendar-Year Plans
  • Participant Distribution Fraud in the "New Normal"
  • Monitor the Plan's service providers
  • Transmit all plan data securely
  • Learn, learn, learn
  • Establish online access
  • Good policies and procedures go a long way

This newsletter is intended to provide general information on matters of interest in the area of qualified retirement plans and is distributed with the understanding that the publisher and distributor are not rendering legal, tax or other professional advice. Readers should not act or rely on any information in this newsletter without first seeking the advice of an independent tax advisor such as an attorney or CPA.

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