401k Contribution Limits 2022 For Married Filing Jointly
The maximum amount a married couple can contribute to their 401k in 2022 is $19,500 per person per year. This includes any matching contributions from employers. The maximum contribution limits are set by the IRS, and are subject to change each year. This means that couples who contribute the maximum amount for the 2021 tax year cannot exceed that amount for 2022.
What is a 401k?
A 401k is a type of retirement savings account that is offered by employers. Contributions to a 401k are made pre-tax and grow tax-free until withdrawn at retirement. Money withdrawn from a 401k is subject to income tax when withdrawn. Employers may also match employee contributions, up to a certain percentage.
401k Contribution Limits for 2021
For 2021, the maximum contribution limit for a 401k is $19,500 per person per year. This includes any employer matching contributions. This limit is subject to change each year. For 2021, the maximum contribution limit for married couples filing jointly is $39,000 per year.
401k Contribution Limits for 2022
For the 2022 tax year, the maximum contribution limit for a 401k is $19,500 per person per year. This includes any employer matching contributions. This limit is subject to change each year. For 2022, the maximum contribution limit for married couples filing jointly is $39,000 per year.
Tax Benefits of a 401k
Contributing to a 401k can provide several tax benefits. Contributions are made pre-tax, which reduces taxable income. This can result in a lower tax bill and an increased refund. Additionally, earnings in a 401k account grow tax-free until withdrawn at retirement. This means that any money earned on investments within the account are not subject to taxes until withdrawn.
Catch-Up Contributions
In addition to the regular contribution limit, individuals age 50 and older may make catch-up contributions of up to $6,500 per year. This is on top of the regular contribution limit and allows individuals to save more for retirement. The catch-up contribution limit for married couples filing jointly is $13,000 for the 2022 tax year.
Withdrawing From a 401k
Withdrawing from a 401k before age 59 ½ generally results in an early withdrawal penalty and taxes on the withdrawn amount. Additionally, it’s important to note that any contributions made to a 401k are subject to taxes when withdrawn. This means that contributions made with pre-tax dollars will be taxed when withdrawn.
Rollovers and Transfers
Individuals may also rollover or transfer funds from one retirement account to another. This includes transferring funds from a 401k to an IRA or vice versa. This can be a great way to consolidate accounts and make managing retirement savings easier.
Bottom Line
The maximum contribution limit for a 401k in 2022 is $19,500 per person per year. This includes any employer matching contributions. Married couples filing jointly may contribute up to $39,000 for the 2022 tax year. It’s important to remember that contributions are made pre-tax and earnings grow tax-free until withdrawn. Additionally, individuals age 50 and older may make catch-up contributions of up to $6,500 per year.
Conclusion
Contributing to a 401k can be a great way to save for retirement. The maximum contribution limit for a 401k in 2022 is $19,500 per person per year. This includes any employer matching contributions. Married couples filing jointly may contribute up to $39,000 for the 2022 tax year. Additionally, individuals age 50 and older may make catch-up contributions of up to $6,500 per year.