2022 Retirement Planning: The New Rules Explained

Of course, it covers the essentials. Do retirement things year after year. What if you’re slower? Increase your contribution rate by even just 1% a year.

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Retirement Planning Basics

Of course, it covers the essentials. Do the right thing year after year. However, you should do specific things to ensure a safe retirement, said Kirsten Hunter Peterson. Mrs. Peterson is the director of Fidelity Investments’ workplace thinking leadership team.

The easiest thing to do is not leave money on the table, Peterson said. In other words, this includes maximizing your 401 (k) or comparable plan to maximize your employer’s contribution. You are denying free money.

Saving enough, however, is another essential retirement planning strategy. In other words, Fidelity suggests 15%. This includes any donations or commercial items. If you save 10% and your company contributes 5%, you will reach your goal of 15%.

What if you’re slower? Increase your contribution rate, even if it’s only 1% a year. Small gains accumulate. And don’t forget to pay off the debt.

Increases Contributions by 401 (k).

Suppose you are 45 years old. The IRA had $ 63,000 in mid-2020. At Fidelity, leaders took the averages of 45-year-old IRA holders. Suppose your IRA grows by 7% a year.

Say you make $ 60,000. Earn an annual increase of 1% and save 6% of salary. Get a corporate share of 3%.

And what? Your retirement fund would be $ 849,551 at age 72.

What happens if you increase your retirement contributions by 1% each year until you and your employer contribute 15% annually? Then follow it until retirement.

However, according to the Bankrate.com 401 (k) calculator, you will have $ 1.019 billion for 72. For five years, a 1% annual increase is a 20% gain of nearly $ 169,400. A good deal. And in this case, the increases in your contributions are around tenths of your annual salary increases.

Savings success

Beyond that, however, smart retirement planning needs to understand the new requirements for 2022.

First, consider which federal tax collectors go to retirement funds.

Think of President Joe Biden’s Build Back Better (BBB) ​​budget proposal. Certainly, if the Senate adopts the BBB as it is written, it will be funded through multiple direct and indirect taxes on retirement savings.

However, a tax will start next year. Roth rear door IRA conversions would be banned. These conversions currently allow you to evade the $ 140,000 income limit on Roth IRA contributions. It’s time to invest in a conventional non-deductible IRA. They are not based on income. Then let’s go to a Roth IRA!

There are no new regulations. You would lose the right to keep your money forever. It would certainly no longer be inherited and preserved for up to ten years. More information available through AARP.

Understand the new taxes

Two new retirement taxes will go into effect if the Senate approves them in 2029. This will allow you to have time to increase income in previous years. This can keep you below the new income levels: $ 400,000 for single taxpayers and $ 450,000 for married joint taxpayers, which trigger the new regulations.

Yet another approach to dealing with higher retirement taxes? Invest in many accounts with different tax treatment, said Roger Young, T. Rowe Price’s senior director of retirement information.

A tax will prohibit new contributions if your full IRA and 401 (k) balance exceeds $ 10 million. Therefore, if they were not saved in a retirement plan, that income would be taxed.

One is indirect. The following year, you should withdraw 50% of your money. Tax laws assess the tax on this money except in a Roth.

However, if your total retirement account balance is over $ 20 million, you should pay for it all.

And don’t assume that these are just problems for the rich. Many middle-class employees become retired billionaires, says IRAHelp.com founder Ed Slott. Suppose a couple earns a reasonable salary. For example, they started saving soon. Many retire with $ 5 million at age 60. They will certainly be able to triple that soon.

Your inflation-proof retirement

However, watch out for rising inflation. Your best ally? Undoubtedly, proper retirement planning includes investing in funds that exceed inflation. This includes S&P 500 index funds. These include commodities, real estate investment funds (REITs) and cyclical stocks.

See the other report in this area for more information.

New contribution limits

You should also keep track of which IRAs have updated contribution limitations. After all, you want to save as much as you can. This is the maximum allowed in RRSPs with deferred taxes.

It also positions you to get the highest quotes from the employer.

These are the maximum donations for 2022:

  • $ 25,900 in 2022 for joint filing of marriages.
  • Amount: $ 6,500, unchanged from 2021.
  • IRA: $ 6,000, same as in 2021.
  • Update on the traditional $ 1,000 IRA or Roth. This is for people 50 and older.


Keep up the good work. Don’t let distractions throw you off. Know your goals. The prize is clear. And achievable. So avoid muddy water. Keep your financial advisors at your disposal 24 hours a day. Never let them forget who the money is. It’s yours. Not theirs. So you better raise them. Make it grow. And loving it. Or give them the old lift!

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