![]() A retirement plan may not discriminate in favor of “highly compensated” employees.For 2022, the compensation paid to an officer that would cause him or her to be classified as a “key employee” is $200,000. A defined benefit plan is top heavy if the present value of the accrued benefits of key employees exceeds 60% of the present value of the accrued benefits of all plan participants. A defined contribution plan is top heavy if the aggregate account balances of key employees exceed 60% of the aggregate account balances of all plan participants. Special rules apply to “top heavy” plans.For tax-exempt entities, the maximum amount which an individual may contribute to a 457(b) plan is $20,500.If your plan has a fiscal year other than the calendar year, this limit is effective for plan limitation years beginning in 2022. The maximum amount of an employee’s annual compensation which may be taken into account for contribution or benefit calculation purposes is $305,000, effective for plan years beginning in 2022.If your defined benefit plan has a fiscal year other than the calendar year, this limit is effective for plan years ending in 2022. The maximum annual benefit which may be paid to an individual in a defined benefit plan is the lesser of 100% of the individual’s average compensation for the highest paid three consecutive years of his or her employment, or $245,000.In other words, total 401(k) contributions are limited to $20,500 (plus the $6,500 catch-up amount if applicable), regardless of how much of the total comes from “pre-tax” 401(k) contributions and how much from Roth 401(k) contributions. These limitations include Roth 401(k) contributions. An individual who is 50 or older in 2022 can make an additional “catch-up” 401(k) contribution of up to $6,500 over and above the $20,500 limit. The maximum annual 401(k) contribution an individual can make is $20,500.An individual who is 50 or older in 2022 and participates in a 401(k) plan can make an additional 401(k) “catch-up” contribution of up to $6,500 over and above the $61,000 amount. If your defined contribution plan has a fiscal year other than the calendar year, this new limit is effective for plan limitation years ending in 2022. That amount includes employer contributions, employee 401(k) contributions, and forfeitures. The maximum annual contribution to an individual’s account in a defined contribution plan (a money-purchase, profit sharing and/or 401(k) plan) cannot exceed the lesser of 100% of the individual’s compensation or $61,000.Below are the new limits for 2022 all have been increased from the 2021 limits except for the catch-up contribution limit which remains at $6,500. ![]() ![]() Retirement Plan Contribution Limits For 2022īy Paula Calimafde, Arnold Sherman, Jessica SummersĮach year the IRS makes cost of living adjustments to many of the limits on benefits from - and contributions to - qualified and non-qualified retirement plans. ![]()
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