Welcome 2022
Happy (belated) New Year!
A new year reminds us that the past is always perfectly clear, and the future is as uncertain as ever. One thing that has become abundantly transparent over the last year is that the inflation we have been experiencing is far from transitory. Together with the potential for rising interest rates and conflict with Russia, the markets have started off the new year in correction mode. While a correction is not unusual, the market hasn’t pulled back more than 5% since the begging of the 2020 Covid pandemic. Long term economic fundamentals remain strong, however, the global concerns mean that short term volatility is likely to persist.
In addition to the new year market turbulence, we have also received updated IRS contribution and deduction limits. These limits are earmarked against inflation and typically increase every one to two years. Due to the recent spike in inflation, these limits have increased substantially for 2022. With the notable exception of IRA and Roth IRA contributions limits, which remain unchanged, I’ve never seen the limits jump so much. Take a look below and familiarize yourself with the new contribution limits on various tax incentivized saving strategies.
Additionally, I’d like to formally welcome Melissa Jones to the team. She has been with us for a few months and many of you have already had the opportunity to meet her. Melissa is a graduate of UW-Milwaukee Lubar School of Business, she has over 10 years’ experience in the financial industry. Her focus has been consulting on corporate retirement plans to promote efficiency for business and increase employee readiness. Melissa also worked extensively as the onsite retirement advisor at one of the largest hospital networks in Wisconsin.
Melissa lives in Appleton, WI with her husband Aaron, son Nico (6), and golden doodle Hershey. They are avid Wisconsin Badger fans and football season ticket holders. Melissa will be working closely with our corporate clients as well as parting with Eric and I to serve our wealth management clients and retirement plan participants. Join me in welcoming Melissa to the team!
Below you will find the updated tax and contribution limits for 2022
Contribution updates:
· Unchanged: IRA and Roth IRA: $6,000 ($7,000 with age 50 catch-up)
· Increased $500: Simple IRA: $14,000 ($17,000 with age 50 catch-up)
· Increased $1,000: 401(k) and 403(b): $20,500 ($27,000 with age 50 catch-up)
· Increased $180: Wisconsin 529 deduction: $3,560 (excess contributions can be carried forward)
In addition, some phase out and contribution limits for higher earning clients:
· Increased $15,000: Annual compensation limit for defined contribution plans increased to $305,000
· Increased $3,000: Total defined contribution limit is now $61,000
· Increased $4000/$6000: The total phase out for Roth IRA contribution is now $144,000 (single) and $214,000 (married filing jointly)
· Increased $2000/$4000: The total phase out for Traditional IRA deductions when already covered by a retirement plan at work is $78,000 (individual) and $129,000 (married filing jointly)
The information given herein is taken from source that IFP Advisors, LLC, dba Independent Financial Partners (IFP), IFP Securities, LLC, dba Independent Financial Partners (IFP), and its advisors believe to be reliable, but is not guaranteed by us as to accuracy or completeness. This is for information purposes only and in no event should be construed as an offer to sell or solicitation or an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as IFP does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors. This report may not be reproduced, distributed, or published by any person for any purpose without IFP's express prior written consent.