February Topic of the Month: IRS Announces Changes to Retirement Plans for 2022
Keeping track of the details for your retirement is difficult, and changes to retirement planning make it even more complicated. Not to worry—we’re here to help. In November 2021 the IRS released changes to retirement plans for 2022. You can see the full details of these changes here, but we’ve laid out some of the most important updates for you.
In 2022, you can put an extra $1,000 into your 401(k) plan, making the contribution limit $20,500. This limit will be the same for employees who participate in most 457 plans, 403(b) plans, and the federal government’s Thrift Savings Plan. There have been no changes to the contributions for traditional and Roth IRAs; these remain capped at $6,000 annually.
Though the caps for IRAs haven’t changed, their phase-out ranges have all increased. A phase-out range for a Traditional IRA determines whether the earner can claim a full or partial deduction—or no deduction at all. Roth IRA phase-out ranges also increased. Roth IRA contributions cannot be deducted on your taxes, so the Roth IRA phase-out range determines what you are able to contribute, meaning that you might have a lower contribution limit or be unable to contribute based on income.
Does this all sound confusing? It can be! But we’re here to help you figure out how these changes impact you and your retirement planning. To talk through how you can best maximize on your savings potential call Orsinger Investment Group, Inc. at (724)588-9067 today.