IRS Announces New 401(k) Limits
On October 21, 2022, the IRS announced[i] information regarding retirement account limits for 2023. The announcement comes just in time for planning for the new year.
Here at Emerald, we lead with financial planning. From 401(k)s to Compensation Benefits, planning is at the heart of how we help clients. Each of the planning vehicles listed below has advantages and may be offered by an employer or a chosen path for retirement planning. Talking with us can help you know how to work towards a plan to maximize the options available to you.
401(k), 403(b), 457 plans, and Thrift Savings Plan
- The amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 in 2022.
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan has increased to $7,500, up from $6,500.
- In total, participants 50 and over can contribute up to $30,000 ($22,500 + $7,500) beginning in 2023.
Traditional and Roth IRA
- The limit on annual contributions to an IRA increased to $6,500, up from $6,000 in 2022.
- The IRA catch-up contribution remains $1,000 for individuals 50 (and is not subject to an annual cost-of-living adjustment).
- The income phase-out range for taxpayers making contributions to a Roth IRA has increased to between $138,000 and $153,000 for singles and heads of household, up from between $129,000 and $144,000.
- The income phase-out range has increased for married couples filing jointly to between $218,000 and $228,000, up from between $204,000 and $214,000.
Some of you may have questions or want to talk, please feel free to call or book an appointment for a quick end-of-year portfolio review. We are here to help however we can.
[i] (2022). Irs.gov. 401(k) limit increases to $22,500 for 2023, IRA limit rises to $6,500. [Online] Available at: 401(k) limit increases to $22,500 for 2023, IRA limit rises to $6,500 | Internal Revenue Service (irs.gov)