The IRS Has Increased the Contribution Limits for 401(K) Plans for 2022.


The 401(k) is something of a gold standard for American workers who want to save for retirement. Employees can choose to contribute a portion of their salary to an employer-sponsored retirement account through a 401(k) plan, and employers can match a portion of those contributions. What are the current and future limits on 401(k) contributions?



The IRS regulates how much employees can save in 401(k) plans, as well as how much they can contribute to similar accounts such as 403(b) and most 457 plans. 401(k) plans provide substantial tax advantages, typically by lowering the account holder’s taxable income during the contribution year.


The maximum 401(k) contribution in 2022 is $20,500.

For 2020 and 2021, the IRS capped the amount anyone could contribute to a 403(b) plan at $19,500. On November 4, 2021, the agency announced that the maximum 401(k) contribution for 2022 would be increased to $20,500. Another 401(k) change for 2022 is that the total maximum contribution by employees and employers has been increased by $3,000 to $61,000.

Each year, the 401(k) contribution limits for workers 50 and older are raised to allow older workers to “catch up” on retirement savings. This amount will remain unchanged in 2022, at $6,500 per worker over the age of 50. If you’re at least 50 years old, your total 401(k) contribution limit for 2022 is $27,000.

If they have a traditional 401(k), employees can choose to have a certain amount or percentage of their salary deducted from their gross income (k). These accounts effectively reduce your taxable income for the year, and you only pay taxes on the contributions (and related earnings) when you withdraw at retirement age.

Some companies also provide a Roth 401(k), which works similarly to a Roth IRA. A Roth 401(k) also deducts money from your paycheck to be invested until retirement. A Roth 401(k), on the other hand, accepts contributions after taxes have been deducted. This means that, even if you do not receive a tax benefit during the contribution year, you do not pay taxes on the contribution or earnings when they are withdrawn.


The House recently passed the ‘Secure Act 2.0,’ which aims to benefit retirement savers.

The United States House of Representatives passed legislation in March 2022 to improve retirement planning for workers. According to CNBC, the Secure a Strong Retirement Act was passed, which included several provisions to help people save for retirement. The bill still needs to pass the Senate before it can become law.


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The following are some of the bill’s provisions:

  • Employers would be required to automatically enroll employees in 401(k) plans at a rate of 3% of their salary, increasing annually until the rate reached 10%. (Employees can change these amounts or opt out.) Businesses that are less than three years old or have ten or fewer employees are exempt.
    Increase in the maximum catch-up contribution to $10,000 (beginning in 2024 for those aged 62–64).
  • An increase in the age at which savers must take required minimum distributions (RMDs).
  • Beginning in 2023, employees may elect to have employer matching contributions deposited into Roth 401(k) accounts rather than pre-taxed accounts.
  • Creating a national database to allow people to reclaim lost retirement accounts.
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