The IRS has announced the 2022 cost-of-living adjustments (COLAs), which impact retirement plans for more than 70 million Americans. These taxpayers will get a 5.9% increase in monthly Social Security benefits and supplemental security income payments in 2022. The COLA is based on three months of Consumer Price Index data, which reflects that prices have risen dramatically since the pandemic began, causing much financial stress for beneficiaries who live on a fixed income. We’ve compiled a side-by-side comparison on the dollar limitations for benefits and contributions over the past three years below.
2020
2021
2022
401(k), 403(b), 457 Contributions
Elective Deferrals
$ 19,500
$ 19,500
$ 20,500
Catch-Up Contributions
6,500
6,500
6,500
IRAs
IRA Contributions
6,000
6,000
6,000
IRA Catch-Up Contributions
1,00
1,000
1,000
SIMPLE Plan
Elective Deferrals
13,500
13,500
14,000
Catch-Up Contributions
3,000
3,000
3,000
Simplified Employee Pensions (SEPs)
Minimum Compensation 408(k)(2)(c)
600
650
650
Maximum Compensation 408(k)(3)(c)
285,000
290,000
305,000
Maximum Contribution
57,000
58,000
61,000
401(k), 403(b), 457 Plans
Annual Compensation 401(a)(17)/404(I)
285,000
290,000
305,000
Defined Contribution Limits 415(c)(1)(A)
57,000
58,000
61,000
ESOP Limit 409(o)(1)(c) – account balance
1,150,000
1,165,000
1,230,000
ESOP Limit 409(o)(1)(c) – lengthening 5-year period
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