Every year, the U.S. Treasury evaluates what's happening with inflation in the economy. Based on that data, the IRS must make changes to various regulations. Fortunately, many upcoming adjustments can help you save more for retirement.
So, whether you're looking for ways to fight inflation or get the most from your retirement accounts, that's what this post will cover. I'll review five retirement account changes coming in 2022, so you can use them to your advantage.
5 Retirement Account Changes to Expect in 2022
- Higher contribution limits for workplace plans.
- Higher income limits for traditional IRA deductible contributions.
- Higher income limits for Roth IRA eligibility.
- Higher income limits for the Saver's Credit.
- Higher contribution limits for retirement accounts for the self-employed.
Here are the details on how you can use the new retirement account changes to max out your contributions and pay less tax.
1. Higher contribution limits for workplace plans.
Starting in 2022, if your employer offers a workplace retirement plan, such as a 401(k) or 403(b), the base amount you can contribute increases from $19,500 to $20,500. The same adjustment applies to most 457 and Thrift Savings Plans (TSPs) if you work for the federal or local government.
So, make a goal to max out your retirement plan by updating your contribution percentage or dollar amount per pay period. You can make changes to your plan at any time during the year. In most cases, you can set a higher contribution rate to begin at a particular time, such as on January 1 each year.
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