401(k) Contribution Limits 2022

The Internal Revenue Service adjusts every tax provision for inflation and changes the cost of living. Because 401k accounts can be tax-deferred accounts, the Internal Revenue Service needs to gradually increase the 401k contribution limits so that highly compensated employees don’t benefit profoundly.

The 401k contribution limits are generally increased by $500 every one or two years. Although the increases aren’t too much, this helps taxpayers get in the way of inflation and save more towards their retirements. Currently, the 401k contribution limit is $19,500 for those under the age of 50 and $26,000 if over. The extra contribution limit is added so that older workers can contribute more towards their retirement.

Expected 401k contribution limit

As mentioned, the 401k contribution limits are increased by $500 every one to years. If the 401k contribution limits were to see an increase in 2022, which is highly likely, we would expect it to be $20,000. Although you might think there might not be any increase at all, we expect a higher increase, quite the contrary. Because the US inflation rate is the highest of the last ten years, it wouldn’t be a surprise to see the IRS increasing the 401k contribution limits more than the usual rate. 

401k Contribution Limit 2022 Chart

Year401k Contribution Limit
2022$20,000
2021$19,500
2020$19,000
2019$18,500
2018$18,500
2017$18,000
2016$18,000
2015$18,000
2014$17,500
2013$17,500
2012$17,000

Employer match limit 

An increase in the 401k contribution limits increases the overall amount an employee can fund an account. Although not every employee is keen enough to match such a high amount, the overall contribution limit with the expected rise is $58.000.

Frequently asked questions about 401k contribution

Can a company limit your 401k contribution?

By law, a company cannot limit how much you contribute to your own 401k account. This is protected by law, but what a company can limit is what portion of your contributions they can match. Unless it is stated otherwise in your employment contract, you can contribute up to your limit.

Are 401k and IRA contribution limits separate?

401k and IRA retirement accounts are two different things, thus, their contribution limits are separate. You cannot contribute more than each of the retirement account, respectively. One thing they have in common is how you get a deduction. See the IRA deduction limits 2022.

Can I contribute more than the limit?

Your account provider that has your 401k or IRA won’t allow you to contribute more than the contribution limit for the year. To keep contributing, you must wait for the next year to begin. We recommend setting aside that money and looking at other investment options.

Does the initial 401k contribution limit include employer match?

The $20,000 contribution limit isn’t the total limit. The limit applies only to employee contributions. Because many employers offer employee matches, you can actually contribute more than your contribution limit amount.

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