2022 IRA and 401(k) Contribution Limits Are Set (There's Both Good and Bad News)

Workers will be happy to know that they can contribute more to their 401(k) accounts next year, but IRA owners may be a little disappointed.

picture of two envelopes saying "good news" and "bad news"
(Image credit: Getty Images)

There's good news and bad news from the IRS for Americans saving for retirement with IRAs, 401(k)s, and other retirement accounts in 2022.

Let's start with the bad news: IRA Contribution limits won't go up next year. For anyone saving for retirement with a traditional or Roth IRA, the 2022 limit on annual contributions to their account remains unchanged at $6,000. It's been stuck at this same amount since 2019. The additional IRA "catch-up" contribution for people 50 and over is not subject to an annual cost-of-living adjustment and stays at $1,000, too.

And now the good news: Workers who are saving for retirement with 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan can contribute up to $20,500 to those plans in 2022. That's a $1,000 increase over the contribution limits in place for 2020 and 2021. The "catch-up" contribution limit for employees age 50 or older who participate in these plans holds steady in 2022 at $6,500, though.

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The contribution limit for a SIMPLE IRA, which is a retirement plan designed for small businesses with 100 or fewer employees, is also increased for 2022. It jumps from $13,500 to $14,000 next year. But, as with 401(k) plans, the catch-up contribution limit for workers at least 50 years old who participate in a SIMPLE plan stays put at $3,000.

Income Ranges for 2022

There's more good news! Increased income ranges for the traditional IRA deduction, Roth IRA contributions, and the Saver's Credit means more Americans will qualify for these tax breaks.

If you're contributing to a traditional IRA, the deduction allowed for your contribution is gradually phased-out if your income is above a certain amount. For 2022, the phase-out ranges are:

  • $68,000 to $78,000 for a single person covered by a workplace retirement plan (up from $66,000 to $76,000 in 2021);
  • $109,000 to $129,000 for a married couple filing jointly if the spouse making the IRA contribution is covered by a workplace retirement plan (up from $105,000 to $125,000 in 2021);
  • $204,000 and $214,000 for a married couple if the spouse contributing to an IRA is not covered by a workplace retirement plan and the other spouse is covered (up from $198,000 and $208,000 in 2021); and
  • $0 to $10,000 for a married person filing a separate return who is covered by a workplace retirement plan (the same as 2021 because this range is not subject to an annual cost-of-living adjustment).

For people saving for retirement with a Roth IRA, the actual amount that you can contribute to the account is based on your income. To be eligible to contribute the maximum for 2022, your modified adjusted gross income must be less than $129,000 if single or $204,000 if married and filing jointly (up from $125,000 and $198,000, respectively, for 2021). Contributions begin to be phased out above those amounts, and you won't be able to put any money into a Roth IRA in 2022 once your income reaches $144,000 if single or $214,000 if married and filing jointly ($140,000 and $208,000 for 2021). The phase-out range for a married person filing a separate return who contributes to a Roth IRA is not adjusted annual for inflation and remains $0 to $10,000 for 2022.

Finally, the 2022 income limit for the Saver's Credit for low- and middle-income workers is $68,000 for joint filers ($66,000 in 2021), $51,000 for head-of-household filers ($49,500 in 2021), and $34,000 for singles filers and married people filing a separate tax return ($33,000 in 2021).

Rocky Mengle
Senior Tax Editor, Kiplinger.com

Rocky is a Senior Tax Editor for Kiplinger with more than 20 years of experience covering federal and state tax developments. Before coming to Kiplinger, he worked for Wolters Kluwer Tax & Accounting and Kleinrock Publishing, where he provided breaking news and guidance for CPAs, tax attorneys, and other tax professionals. He has also been quoted as an expert by USA Today, Forbes, U.S. News & World Report, Reuters, Accounting Today, and other media outlets. Rocky has a law degree from the University of Connecticut and a B.A. in History from Salisbury University.