If you’re eager to save more for retirement in 2023, there’s good news from the IRS: higher limits for your annual 401(k) plan and individual retirement account contributions.
The employee contribution limit for 401(k) plans is increasing to $22,500 in 2023, up from $20,500, and catch-up deposits for savers age 50 and older will jump to $7,500, up from $6,500. The new amounts also apply to 403(b), most 457 and Thrift Savings Plans.
The agency has also increased contribution limits for IRAs, allowing investors to save $6,500 in 2023, up from $6,000 in 2022. The catch-up deposit will remain at $1,000.
More from Personal Finance:
IRS: Here are the new income tax brackets for 2023
How much you can earn and still pay 0% capital gains taxes in 2023
IRS bumps up estate tax exclusion to $12.92 million for 2023
The boost for IRA contributions is significant, as the cap hasn’t changed since 2019, limiting savings for Americans without a workplace retirement plan.
And more Americans may also qualify for Roth IRA contributions, with the adjusted gross income phaseout range rising to between $138,000 and $153,000 for single filers and $218,000 and $228,000 for married couples filing jointly.
Source: https://www.cnbc.com/2022/10/21/investors-can-contribute-up-to-22500-in-a-401k-and-6500-in-iras-in-2023.html