The 2022 cost-of-living adjustments (COLAs) that affect pension plan dollar limitations and other retirement-related provisions have been released by the IRS. In general, many of the pension plan limitations will change for 2022 because the increase in the cost-of-living index due to inflation met the statutory thresholds that trigger their adjustment. However, other limitations will remain unchanged.

The 2022 cost-of-living adjustments (COLAs) were released for:

  • pension plan dollar limitations, and
  • other retirement-related provisions.

Highlights of Changes for 2022
The contribution limit has increased from $19,500 to $20,500 for employees who take part in:

  • 401(k),
  • 403(b),
  • most 457 plans, and
  • the federal government’s Thrift Savings Plan.

The catch-up contribution limit for employees aged 50 and over in the plans above remains $6,500.

The annual limit on contributions to an IRA remains unchanged at $6,000. The $1,000 IRA catch-up contribution amount is not subject to inflation adjustments.

The income ranges increased for determining eligibility to make deductible contributions to:

  • IRAs,
  • Roth IRAs, and
  • to claim the Saver’s Credit.

Phase-Out Ranges
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. The deduction phases out if the taxpayer or their spouse takes part in a retirement plan at work. The phase out depends on the taxpayer’s filing status and income.

  • Single taxpayers covered by a workplace retirement plan, the phase-out range is $68,000 and $78,000, increased from between $66,000 and $76,000.
  • Joint filers, when the spouse making the contribution takes part in a workplace retirement plan, the phase-out range is $109,000 and $129,000, increased from between $105,000 and $125,000.
  • An IRA contributor, who is not covered by a workplace retirement plan but their spouse is, the phase out is between $204,000 and $214,000, increased from between $198,000 and $208,000.
  • For a married individual filing a separate return who is covered by a workplace plan, the phase-out range remains $0 to $10,000.
  • The phase-out ranges for Roth IRA contributions are:
  • $129,000 to $144,000, for singles and heads of household,
  • $204,000 to $214,000, for joint filers, and
  • $0 to $10,000 for married separate filers.

Finally, the income limit for the Saver’ Credit is:

  • $68,000 for joint filers,
  • $51,000 for heads of household, and
  • $34,000 for singles and married filing separately.