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