By Kevin Theissen
Preparing for retirement just got a little boost. This week, the Internal Revenue Service (IRS) announced new contribution limits for 2022.
Staying put for 2022 are traditional Individual Retirement Accounts (IRAs), with the limit remaining at $6,000. The additional catch-up contribution for traditional IRAs also remains at $1,000 for people aged 50 and over.
For workplace retirement accounts, for example 401(k), 403(b) and others, the contribution limit rises $1,000 to $20,500. Catch-up contributions remain at $6,500.
Eligibility for Roth IRA contributions has increased, as well. These have bumped up to $129,000 and $144,000 for single filers and heads of households, respectively, from $204,000 to $214,000 for those filing jointly as married couples. So, if you make less than these limits, you are able to contribute to a Roth IRA. If you earn more than these limits you are not able to contribute.
Another increase was for SIMPLE IRA Plans (SIMPLE is an acronym for Savings Incentive Match Plan for Employees), which increases from $13,500 to $14,000.
If these increases apply to your retirement strategy, you may want to make some adjustments to your contributions. You should also review your holdings at least once a year — and know what you own and why.
Kevin Theissen is the owner of HWC Financial in Ludlow.