In the event you’re desperate to save more for retirement in 2023, there’s excellent news from the IRS, which just announced higher limits to your annual 401(k) plan and individual retirement account contributions.
The worker 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 brand new amounts also apply to 403(b) plans, most 457 plans and Thrift Savings Plans.
The agency has also increased contribution limits for IRAs, allowing investors to save lots of $6,500 in 2023, up from $6,000 in 2022. The catch-up deposit will remain at $1,000.
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The boost for IRA contributions is critical, because the cap hasn’t modified since 2019, limiting savings for Americans with no workplace retirement plan.
And more Americans can 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.