One upside to rising prices is that they’ve prodded the Internal Revenue Service (IRS) to boost a few cost-of-living adjustments for tax year 2022. This means workers can save up to $20,500 in their company-sponsored 401(k) plans next year (a boost of $1,000 over 2021), as you can see in the chart below. Those age 50 and older can make an additional $6,500 “catch-up” contribution, bringing their annual limit to $27,000. And while it’s not in the chart, the IRS also raised the annual gift limit to $16,000 from $15,000 and raised the estate and gift tax exemption to $12.06 million from $11.7 million. These moves give investors a leg up on saving for retirement and passing more of their wealth on to heirs.
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