In late October, the IRS announced that they would raise retirement account contribution limits for 2023.
Here are the highlights of the limit increases.
401(k), 403(b), 457 plans, and Thrift Savings Plan
The amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 in 2022.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased to $7,500, up from $6,500.
In total, participants 50 and over can contribute up to $30,000 ($22,500 + $7,500) beginning in 2023.
Traditional and Roth IRA
The limit on annual contributions to an IRA increased to $6,500, up from $6,000 in 2022.
The IRA catch-up contribution remains $1,000 for individuals 50 (and is not subject to an annual cost-of-living adjustment).
The income phase-out range for taxpayers making contributions to a Roth IRA has increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000.
The income phase-out range has increased for married couples filing jointly to between $218,000 and $228,000, up from between $204,000 and $214,000.
If you own a qualified retirement savings account and want to see if increasing your contribution accordingly is appropriate, please speak to your financial advisor.
If you have further questions about financial impacts do not hesitate to email us at office@staltfinancial.com or call 248-733-4344.
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