Save More in Tax-Advantaged Retirement Accounts in 2023
Currently, we are living in a crazy environment filled with inflation and rising prices. However, there is some good news. With the rising interest rates, you can actually save more too. Live Oak Bank is an online bank, and their high-yield savings account is up over 2.3%, and they have CDs that are even higher than that. This isn’t happening just at this particular bank, but all over.
The IRS has recently given you the chance to save more in your 401k in 2023. Currently, you can max out your 401k at $20,500. The IRS is raising this number to $22,500 in 2023 for people under the age of 50. If you’re over the age of 50, they raised it to $30,000. For entrepreneurs who have solo 401ks, you can now contribute up to $66,000 if you’re under the age of 50. If you’re over the age of 50 you can contribute $73,500.
They also recently raised the income limit for a Roth IRA. If you are married and make a combined income of $218,000-$228,000 you’ll be phased out. So you won’t be able to put the full amount if you make that combined. The same thing goes for single people making $138,000-$153,000. If you’re over those limits, you can always do a backdoor Roth.
14% of Americans today are maxing out their 401ks and 37% of households are contributing the maximum to their IRA accounts. We live in a consumption-heavy society and with this carry a lot of debt. The personal debt intake is actually higher than ever. With this in mind, it is important to be smart and save money.
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