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Employee benefit plan and IRA quick-reference table 2021 vs 2022

Nov 11, 2021

Each year, we put out a quick-reference table comparing the cost-of-living adjustments (COLA) applicable to dollar limitations for various qualified retirement plans and other amounts.

The IRS has recently announced 2022 COLA limits.

What’s changed?

Many pension plan limitations changed for 2022 because the increase in cost-of-living index statutory thresholds triggered their adjustments.

While no changes were made to the elective deferral limit catch-up contributions, there was an increase of $1,000 on deferrals for qualified plans. Plan sponsors should verify that their administrative and payroll systems reflect the appropriate limits. Also, review for accuracy any communications that specify benefit plan limits before providing materials to participants.

2021 vs 2022 comparison

2021 2022
Compensation limit (IRC Sec. 401(a)(17)) $290,000 $305,000
Defined benefit plan annual benefit limit $230,000 $245,000
Defined contribution plan annual contribution limit $58,000 $61,000
Social Security tax wage base $142,800 $147,000
Highly compensated employee compensation threshold $130,000 $135,000
Key employee officer compensation threshold $185,000 $200,000
SEP compensation threshold $650 $650
401(k), 403(b), 457(b) and SARSEPs
   
Elective deferral limit(2) $19,500 $20,500
Catch-up contribution(3) $6,500 $6,500
SIMPLE Plan
   
Elective deferral limit(2) $13,500 $14,000
Catch-up contribution(3) $3,000 $3,000
IRA
   
Contribution limit(2) $6,000 $6,000
Catch-up contribution(3) $1,000 $1,000
Traditional IRA Deduction Phaseout Range (AGI)
   
Single, head of household - active participant $66,000/$76,000 $68,000/$78,000
Married filing separate - any spouse participates $0/$10,000 $0/$10,000
Married filing joint - nonparticipating spouse $198,000/$208,000 $204,000/$214,000
Married filing joint - participating spouse $105,000/$125,000 $109,000/$129,000
Roth IRA contribution eligibility phaseout range (AGI)
   
Married filing joint $198,000/$208,000 $204,000/$214,000
Single, head of household $125,000/$140,000 $129,000/$144,000
Married filing separate - any spouse participates $0/$10,000 $0/$10,000
Retirement saver's credit limitation (AGI)
   
Married filing joint $66,000 $68,000
Head of household $49,500 $51,000
Married filing separate, single $33,000 $34,000

(1) This table has been updated based on IRS Notice (2021-61), November 4, 2021.
(2) This applies to the total of all elective deferrals an individual makes for the year to 401(k) plans, 403(b) plans, SARSEPs and SIMPLE plans. However, deferrals to each SIMPLE plan in which the individual participates are also limited, as shown later in the table.
(3) Catch-up contributions are available each year to individuals who reach age 50 by December 31.

 

Contact us for assistance

If you have any questions, or for more information about the 2022 cost-of-living adjustments, please contact your Wipfli relationship executive or benefit specialist.

Wipfli’s employee benefit services practice is an independent, fee-for-service consulting, record keeping and compliance provider dedicated to helping clients meeting their employee benefit needs. We’ve been providing qualified and non-qualified plan services for over 30 years.