The IRS has announced inflation-adjusted figures for retirement account savings for 2023 and I want to provide an update on popular retirement savings plans contribution limits.
In 2023, eligible individual can contribute up to $6,500, up from $6,000, to their traditional Individual Retirement Accounts (IRAs) and Roth IRAs ($7,500 with a catch up contribution if you are age 50 or older)
For workplace retirement accounts (i.e. 401(k), 403(b), etc.), the contribution limit increases $2,000 to $22,500. The catch-up contribution limit for employees aged 50 and over who participate in these plans increases from the 2022 limit of $6,500 to $7,500. So if you are over the age of 50, you can contribute as much as $30,000 into your 401(k) or 403(b).
Eligibility for Roth IRA contributions has also increased. Contribution limits are based on your filing status and modified AGI (adjusted gross income):
- 2022 Roth IRA income phase out limits
- Single: $129,000 - $144,000
- Married Filing Jointly: $204,000 - $214,000
- 2023 Roth IRA income phase out limits
- Single: $138,000 - $153,000
- Married Filing Jointly: $218,000 - $228,000
It’s not too late to make a 2022 contribution! The deadline for IRA contributions (Roth, Traditional or SEP) for the 2022 tax year is Tuesday April 18, 2023 or the day you file your taxes, whichever comes first. Normally the tax deadline is April 15. But in 2023 that date falls on a Saturday and the following Monday is Emancipation Day, which is a recognized holiday in Washington D.C. As a result, tax day has been pushed back until the following Tuesday April 18, 2023.
I hope you found this update timely and informative. If you want to set up a time to discuss your tax situation or savings plan, don't hesitate to call or email me. You can also schedule a phone call or Zoom meeting by clicking here.
This information is not intended to be a substitute for specific individualized tax advice. I suggest that you discuss your specific tax issues with a qualified tax advisor. Securities and Advisory services offered through LPL Financial. A registered investment advisor.