401(k) and Gifting Limits for 2022

Chart of the Week: 401(k) and Gifting Limits Raised for 2022

November 15, 2021

Director of Research Jeff DeMaso By Director of Research Jeff DeMaso

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.

401(k) contribution limits increased
Source: Internal Revenue Service.

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