Contribution limits to benefit plans have grown significantly over the years.  But the growth is largely the result of inflation.  Did you know that in 1986, an employee could contribute only $7,000.00 to his/her 401k plan?  What’s more, there was no Catch-up provision for those 50 and older.

This year (2021) employees can contribute up to $19,500.  Those 50 and older can contribute an additional $6,500.  Employee and employer contributions are capped at $58,000.

Once again in 2022, both the 401k employee contribution and the total contribution limit will increase.  But 401ks are not alone.  The Internal Revenue Code requires contribution caps to be adjusted annually for retirement plans, IRAs, pension benefits, HSAs, and even how much of your benefits will be subject to the Social Security Tax.

The Society of Human Resource Management (SHRM) has compiled the attached chart detailing the new contribution limits for 2022.  We will soon be reaching out to our clients, encouraging them to take full advantage of this opportunity for increased deferrals and tax savings.

2022 Benefit Plan Limits and Thresholds Chart