This Just In ...

401(k) Elective Deferral Limits Raised for 2022

The Internal Revenue Service (IRS) has made it easier for employees to save more in their 401(k) retirement accounts by increasing the elective deferral limits.

One of the biggest benefits of a 401(k) employer-sponsored retirement savings plan is that every dime an employee contributes –up to the limit — can reduce their current-year tax bill. Qualified individuals can contribute up to $20,500 from their paycheck, up from $19,500 in 2021. Employees fifty or older can make an additional $6,500 catch-up contribution.

The contribution limit for small business SIMPLE IRAs increases from $13,500 to $14,000 this year. The catch-up contribution limit for workers at least 50 years old with SIMPLE plans remains $3,000.

Employers can make matching contributions of 100 percent or less to these accounts, but for 2022 the total regular contributions for employer and employees cannot exceed $61,000, or the annual pay, whichever is less. Or $67,500 for employees 50 and older.

The salary cap for highly compensated workers increased to $305,000 in 2022, up from $290,000 in 2021. These workers may still be eligible to contribute to a 401(k), but employers may not be able to match contributions to those retirement accounts.

In this issue:

This Just In ... 401(k) Elective Deferral Limits Raised for 2022

How to Fight the Employee Exodus

What Can Employers Do About High Drug Costs?

Not Following the Employer Mandate Can Mean Stiff Penalties

Why It Makes Sense to Offer a Digital Security Benefit to Employees

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