Category: 5. Retirement plan contribution limits

When contributing to a retirement account, whether an employer-sponsored plan or an IRA, you could be eligible for a tax credit on your income tax return. This credit is an incentive targeted at low- and moderate-income workers to encourage retirement savings.

For 2022 the AGI (Adjusted Gross Income) limit for the saver’s credit (also known as the retirement savings contribution credit) is $65,000 for couples married filing jointly and $48,750 in 2022 for heads of household.

For single individuals or those married filing separately, the limit is $32,500 for 2022, up from $32,000 in 2019.

There are a few changes to contribution levels for self-employed retirement plans in 2022, compared with 2018:

SIMPLE IRA. $13,500 in 2022. The catch-up provision for taxpayers age 50 and older remains unchanged at $3,000 in 2022.

SEP IRA. Has increased to $57,000 in 2022. SEP IRA contribution maximums are based on a contribution rate of up to 25% of gross income (after subtracting out the amount of the contribution itself). That income limit has ticked up to $285,000 in 2022.

Solo 401(k). Matching the employee 401(k) limits, contributions to a Solo 401(k) are the same as the SEP IRA contribution limits. They have also increased to $57,000 in 2022. The catch-up provision for taxpayers age 50 and older remains unchanged at $6,500 in 2022.

Check your retirement income:

2022 Retirement Contribution Limits Table

RETIREMENT ACCOUNT	2019	2020	CHANGE
401(k), 403(b), or 457 plans	$19,000	$19,500	Increase
50+ catch-up limits for above	$6,000	$6,500	Increase
Traditional IRA plans	$6,000	$6,000	None
Roth IRA plans	$6,000	$6,000	None
50+ catch-up limit for IRAs	$1,000	$1,000	None
SIMPLE IRA	$13,000	$13,500	Increase
50+ catch-up limit for SIMPLE IRA	$3,000	$3,000	None
SEP IRA	$56,000	$57,000	Increase
Solo 401(k)	$56,000	$57,000	Increase
50+ catch-up limit for Solo 401(k)	$6,000	$6,500	Increase

Roth IRA eligibility is also subject to phaseout based on income, but those limits are different from what they are for traditional IRAs. The income level phaseouts for 2022 are as follows:

• Single taxpayers — between $124,000 and $139,000
• Married filing jointly — between $196,000 and $206,000
• Married filing separately — between $0 to $10,000

If you or your spouse are covered by another retirement plan, IRAs have income limits beyond which their tax deductibility is phased out, until it disappears completely.

Here are the income range phaseouts for 2022 for those who are covered by another retirement plan — they apply strictly to deductible traditional IRAs:

• Single taxpayers — between $65,000 and $75,000
• Married filing jointly — between $104,000 and $124,000
• Married filing jointly in which the spouse making the IRA contribution is NOT covered by a pension, but the other spouse is — between $196,000 and $206,000
• Married filing separately — between $0 and $10,000

As is the case every year, a New Year brings changes for retirement plan contributions and limits. Retirement plans, such as employer-sponsored plans and self-employed plans, can be affected.

Some years bring more changes than others. So what’s new for 2022?

Below are the 2022 limits for the most popular retirement plans, including 401(k)s and IRAs.

Employer-Sponsored Retirement Plan Limits

401(k) plans. For all employer-sponsored retirement plans — like 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan — the contribution limit for 2022 is $19,500.

401(k) catch-up. The catch-up contribution limit for employees ages 50 or older who participate in the above mentioned plans remains at $6,500 for 2022. Even if you don’t turn 50 until Dec. 31, 2018, you can make the additional $6,500 catch-up provision for the current year.

IRA plans. IRA (or Individual Retirement Account) contribution limits stayed the same from 2013 through 2018. The annual limit was $5,500, and many blame this on low-inflation problems. However, the limit increased to $6,000 in 2019 and remains the same for 2020. The catch-up provision for IRAs is unchanged at $1,000, because it is not subject to an annual cost-of-living adjustment. This makes the maximum IRA contribution for those 50 and older $7,000 for 2022.