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Planning to save more this year? There’s a higher 401(k) employee deferral limit for 2022, and now’s the time to boost contributions, financial experts say.
Employees may funnel $20,500 into 401(k), 403(b) and other plans for 2022, up from $19,500 in 2021, thanks to cost-of-living adjustments from the IRS, and catch-up deposits for investors 50 and older are $6,500.
“You’re smart to jump on this,” said certified financial planner Catherine Valega, wealth consultant at Green Bee Advisory in Winchester, Massachusetts. “Most people set [401(k) contributions] once and never look back.”
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If you aim to max out 401(k) contributions for 2022, it may pay off to start early, as spreading it out may be more manageable than year-end increases.
And more time in the market may offer more growth potential, said Marguerita Cheng, a Washington-based CFP, CEO and co-founder of Blue Ocean Global Wealth and a member of CNBC’s Advisor Council.
“The sooner you can increase your contributions, the sooner you can have your money working for you,” she said.
The sooner you can increase your contributions, the sooner you can have your money working for you.
Marguerita Cheng
CEO and co-founder of Blue Ocean Global Wealth
