Translations from Your Trusted Advisor.
As stocks have taken a dip in 2022, with potential for the market to become a bear market, this may be a good time to consider converting retirement assets to a Roth IRA. Transferring funds from a traditional IRA or 401 (k) plan into a Roth account can be beneficial over the long-term because the assets grow tax-free in a Roth account, whereas in a traditional account an investor owes the taxes at distribution time.
Looking to save for retirement and maybe even save on you 2021 taxes?
While you cannot contribute more to your employer sponsored retirement account after year end, you may be able to contribute to an Individual Retirement Account. The deadline to contribute to an IRA for 2021 is April 18, 2022. Depending on your adjusted gross income, you may be able to take a deduction for a portion of your contribution, even if you are offered a retirement plan at your employer. If only your spouse is covered by a retirement plan at work, the income limits are more generous.
Yesterday, the IRS released Notice 2021-61 which provides cost of living adjustments for retirement plans for 2022.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have increased $1,000 to $20,500. The annual catch-up limitation for employees over age remains unchanged from 2021, at $6,500.
Yesterday, the Social Security Administration issued a press release with updates for 2022 including updating their fact sheet.
The updates include:
On Monday, the IRS released Notice 2020-79 which provides cost of living adjustments for retirement plans for 2021.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits have remained the same as 2020 at $19,500. The annual catch-up limitation for employees over age also remains unchanged from 2020, at $6,500.