IRS Set to Increase Retirement Plan Contribution Limits in 2023

With the news buzzing about raging inflation and the increased cost of living, there is a silver lining buried in these bleak reports. In 2023, the IRS is increasing the contribution limits to Americans’ 401(k)s and IRAs at unprecedented rates. Account values are down, so this presents an excellent opportunity to ramp up savings.

How much are limits increasing?

401(k), 403(b), and government TSP contribution limits are increasing by $2,000 from $20,500 in 2022 to $22,500 in 2023. That’s the largest increase on record, almost 10%. Individuals ages 50 and over, will be able to contribute an additional $7,500 in 2023 for a grand total of $30,000 annually. IRA and Roth IRA account owners may contribute up to $6,500 in 2023, a $500 increase over 2022 limits. Catch-up contributions for those 50 and older will remain at $1,000 for a new total of $7,500.

Income Phaseout Ranges Increase

The income phaseout ranges for Roth IRA contributions will also increase in 2023. Individuals may earn between $138,000 and $153,000 and those married filing jointly may earn between $218,000 and $228,000 and make a Roth IRA contribution.

Ramp Up Your Contribution

Use this occasion to ramp up the contribution percentage in retirement plans in order to make lemonade out of the market’s current dip and uncertainty. Buying in while the market is down allows each contribution to buy more shares and therefore allows for more growth opportunity with more shares owned.

Have more questions? Contact Us

Missie Beach, CFP®, CDFA®

Senior Financial Advisor

Recent posts

  • Greenlight Debit Card 2024 Update
  • What Should I Do with an Inherited 401(k) or IRA?
  • can i collect social security and a pension at the same time
By Published On: November 9, 2022

Share This Story, Choose Your Platform!

Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.

Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.

To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.

Sign up for our newsletter!

Our latest blogs, podcasts, and educational videos delivered to your inbox weekly.