IRS Announces 2023 Contribution Limits for Retirement Plans

The IRS recently released updated contribution limits for 2023. Knowing the limits for different types of accounts can help you maximize your retirement savings - it may be time for you to log into your retirement plan account and increase your contribution rate!

Here are the new 2023 limits so you can stay on top of your contributions:

• 401(k) and 403(b) Deferral Limit: Increases to $22,500 from $20,500 (additional catch-up if you are over age 50 increases to $7,500 in 2023 for a total of $30,000).  

• IRA Limit (including Roth IRAs): Increases to $6,500 in 2023, up from $6,000 (the catch-up for those over the age of 50 is still with an additional $1,000 for a total of $7,500).

• SEP IRAs: The limit in 2022 was $61,000 and increases to $66,000 in 2023 (with a cap of 25% of your net earnings - see your accountant or tax professional for more details).

• SIMPLE Retirement Accounts: increases to $15,500 (up from $14,000). The catch-up contribution limit for SIMPLE IRA accounts increases to $3,500.

• Profit Sharing Accounts: Increases to $66,000 for 2023 ($73,500 including the catch-up contribution).

The Roth IRA income phase-out range for single filers and heads of household in 2023 will be between $138,000 and $153,000, up from $129,000 – $144,000 in 2022. The 2023 Roth IRA income phase-out range for married couples filing jointly will be between $218,000 to $228,000, up from between $204,000 and $214,000 in 2022.

With some careful planning, you can make sure you maximize every dollar you're bringing home. Also, as usual, make sure to check with your tax professional for questions regarding your specific situation.

This information is believed to be accurate at the time of publication. Please refer to the IRS website for official information and refer to your tax professional for individual matters.