401k Contribution Limits 2022 Multiple Employers
401k contributions can be a great way to save for retirement. But did you know that if you are employed by multiple employers, there are extra rules that you must follow? It’s important to understand the 401k contribution limits 2022 multiple employers when planning how much you can save for retirement.
What Is the Contribution Limit?
The annual contribution limit for 401k plans for 2022 is $19,500. This is the maximum amount that you can contribute from all salary deferral sources regardless of how many employers you work for. However, you may be eligible to make additional “catch-up” contributions if you are age 50 or older before the end of the year.
What Is the Catch-Up Contribution Limit?
The catch-up contribution limit for 2022 is $6,500. This is the maximum amount that you can contribute from all salary deferral sources if you are age 50 or older before the end of the year. This means that you can contribute up to $26,000 in total contributions to your 401k.
How Are the Limits Applied to Multiple Employers?
If you are employed by multiple employers, you must combine the total of all your salary deferrals and catch-up contributions when determining your total contribution limit. For example, if you contribute $7,000 to one 401k plan and $4,000 to another, your total contributions for the year would be $11,000. If you are age 50 or older and make catch-up contributions, you must also combine these when determining your total contribution limit.
What Are the Consequences of Exceeding the Limit?
If you contribute more than the annual contribution limit for the year, you will have to pay a 6% excise tax on the amount of the excess contribution. This tax is in addition to any income taxes you may owe on the contributions. You may also be subject to additional penalties. In addition, you may be required to withdraw the excess contribution and any associated earnings.
Are There Any Exceptions to the Limit?
Yes, there are a few exceptions to the contribution limit. These include: 1) employer non-elective contributions, 2) employer matching contributions, and 3) after-tax Roth contributions. These contributions are not subject to the annual contribution limit and can be used to increase your retirement savings.
What Other Factors Should I Consider?
When considering how much to contribute to your 401k plan, you should also consider your current financial situation and long-term goals. You should also consider your investment options and any fees associated with the plan. In addition, you should consider the tax implications of any contributions or withdrawals.
Conclusion
When saving for retirement through a 401k plan, it’s important to understand the 401k contribution limits 2022 multiple employers. The annual contribution limit is $19,500 and the catch-up contribution limit is $6,500 if you are age 50 or older. If you are employed by multiple employers, you must combine the total of all salary deferrals and catch-up contributions when determining your total contribution limit. By understanding the rules and regulations for 401k contributions, you can make the most of your retirement savings.