Retirement Account Contribution Limits
A contribution is the amount of money that you and an employer put into an account for your retirement. If you’re self-employed, a portion of your income can also be deposited into a retirement account.
Retirement plans include IRA, 401k, 403b, and 457 plans. While you and your employer are welcome to contribute, there are limits as to how much money can be placed in the accounts each year. Due to the increase of cost-of-living expenses that occur, the limit is also adjusted each year.
IRS contribution limits change annually. Refer to IRS website for contribution limits. According to the IRS, in 2022, the contribution limit for an IRA and Roth IRA is $6,000. The contribution limit for 401k, 403b, and 457 accounts is $20,500.
In 2022, once you reach the age of 50, you are eligible to make catch-up contributions annually. If you have an IRA or Roth IRA, the catch-up limit is $1,000. If you are 50 years old and older, and you have a 401k, 403b, or 457 plan, the catch-up limit is $6,500.
Whether you have an IRA, 401k, or other retirement plan in place, it’s important to consult the IRA website for annual limit updates.