Max. 401(k) contributions for 2022

Ravi Kurani
Main Picture

If you want a sizable nest egg when you reach retirement age, you’re in luck.

According to new updates from the IRS, the 401(k) contribution limit for 2022 is higher than in previous years.

To learn more about this change and what it means for you, continue reading.

What is the Maximum Contribution to a 401(k) in 2022?

The IRS has recently announced that taxpayers under the age of 50 can now put an extra $1,000 into their 401(k) plans, raising the 2022 401(k) contribution limit from $19,500 to $20,500.

If you have multiple 401(k) accounts, your total contributions cannot exceed that $20,500 limit.

For workers over the age of 50 who are eligible for “catch-up” contributions, their 2022 401(k) contribution limit is $27,000.

The $6,000 contribution limit for traditional and Roth IRAs remains unchanged at $6,000. Any contributions to an IRA don’t impact your 401(k) limit.

Take advantage of your 401(k) match
Matchly helps you to max out your 401(k) match without reducing your paycheck.
Learn More

How Does This Impact Your Financial Goals?

According to the majority of experts, you should save at least 15% of their income for retirement. This includes any matching contributions that workers receive from their employers. So if your employer matches up to 6%, you should contribute 9% of your income.

However, there are some significant advantages to contributing as much to that $20,500 401(k) contribution limit as you can. Here are three of them.

You can lower your taxable income.

Because your total contribution to a 401(k) plan is deducted from your taxable income, you pay fewer taxes the more money you put in. This can generate some pretty incredible savings, especially if you’re on the borderline between two tax brackets.

You can meet your financial goals earlier.

Obviously the faster you put money into your 401(k), the faster you can reach that end amount. That puts you that much closer to your goals.

More money = more compounding interest.

It’s a basic rule of compound interest: the more money you have in your 401(k), the more interest you’re going to generate. As a result, it’s important to max out your retirement accounts as soon as it’s financially feasible. That way, you can increase the size of the account and your potential earnings in retirement.

Claim your entire employer match.

Your employer match is exactly that: a match. So if you want to get that money, you have to put money into your 401(k). While few employers actually match up to $20,500, it’s a good reason to invest as much in your retirement accounts as you can manage.

If you want to get a jump start on 401(k) investments by claiming your employer match, use the calculator below to see how much Matchly can help.

Find out how much additional 401(K) match you can keep with Matchly

Matchly advances you money so you can access up to thousands of dollars in 401(k) match every year without reducing your paycheck.

Get your full 401(k) match

Get up to thousands of additional dollars every year from your employer starting with your next paycheck

Enjoy your full paycheck

Matchly finances your 401(k) contributions for you, so you don’t have to take a cut out of your paycheck to get your match.

Find out how much 401(k) match you can get with Matchly

Where do you work?
What is your annual salary?
You can earn up to an additional
$250 per month
($3,000 per year) 1
Join hundreds of people who are ready to build a better financial future All Rights ReservedTerms of usePrivacy Policy