New Year, New Limits
Are you someone who sits down at the beginning of the year and plans out how much you will be investing into your retirement? If you are, now is a good time to reevaluate those numbers. The IRS passed some new guidelines that might affect how much and where you can put your money. Starting in 2022, employees are now able to contribute $1,000 more to their 401(k) than in 2021. The new limit, $20,500 ($1,708 if you want to split that up monthly), applies to 401(k) accounts, 403(b)s and even some 457 and Thrift Savings Plans.
Another number to review is your Roth IRA contributions. If you were previously over the earnings threshold to be eligible to contribute, there is a chance you are eligible now. Previously the earnings threshold was $129,000 for individuals and $204,000, the new thresholds are $144,000 and $214,000 respectively.
One other change is to HSA (Health Savings Account) limits, though it is not as much as the above increases, the individual contribution limit has been increased by $50 and family contribution limit by $100. The new limits are $2,650 and $7,300.
Whether annual planning is a normal part of your process, or this is all new to you it is always important to talk to a financial planner and evaluate what you are eligible for and what best fits your situation. Even if you are eligible for additional ways to invest in your retirement those might not always be the most savvy option for you or your situation.