There have been some changes to the tax laws which affect taxpayers who are retired, preparing to retire, and those who are beginning to save up for retirement. Required minimum distributions (RMDs) – Due to higher life expectancies, the IRS has made some changes to the table used to calculate your RMD resulting in a smaller minimum distribution starting in 2022.
- Maximum contribution for retirement plans increased to $20,500 (up from $19,500 in 2021).
- Individuals born before 1973 can still put in an extra $6,500 as a “catch-up” contribution.
- In addition, the cap on Simple IRA contributions has gone up to $14,000 ($13,500 in 2021) plus an additional $3,000 for people 50 or older.
While the contribution limits for traditional IRAs and Roth IRAs have remained at $6,000, with an additional $1,000 catchup if 50 or older, the income ceilings on Roth IRAs has gone up. Contributions phase out in 2022 at adjusted gross income of $204,000 to $214,000 for married filers (up from $198,000 to $208,000 in 2021) and $129,000 to $144,000 for single filers (up from $125,000 to $140,000 in 2021).
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