Near-record levels
The Internal Revenue Service has released new limits for the coming year. After months of high inflation and financial uncertainty, some of these cost-of-living-based adjustments have reached near-record levels.
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Individual Retirement Accounts (IRAs)
IRA contribution limits are up $500 in 2023 to $6,500. Catch-up contributions for those over age 50 remain at $1,000, bringing the total limit to $7,500.
Roth IRAs
The income phase-out range for Roth IRA contributions increases to $138,000-$153,000 for single filers and heads of household. This is a $9,000 increase. For married couples filing jointly, the phase-out will be $218,000 to $228,000. This represents a $14,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.
Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $2,000 increase for 2023. The limit is rising to $22,500. Those aged 50 and older will now have the ability to contribute an extra $7,500, bringing their total limit to $30,000.
SIMPLE Accounts
A $1,500 increase in limits for 2023 gives individuals contributing to this incentive match plan a $15,500 stop light.
Other Changes
In addition to the changes in contribution limits, the IRS also announced several other key updates for 2023.For instance, the IRS increased the annual exclusion for gifts to $17,000 per person and raised the estate tax exclusion threshold.
It’s important to keep in mind that this update is for informational purposes only. Therefore, before making any decisions or changes based on the new 2023 levels, it’s advisable to consult with your tax professional. Additionally, you may want to reach out to your trusted financial advisor, who can provide you with further guidance and information about the upcoming changes.
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MarketingPro, Inc. prepared this material, which does not necessarily reflect the views of the presenting party or their affiliates. The information comes from sources believed to be accurate, but please note that investing involves risk, and past performance does not guarantee future results. The publisher does not provide legal, accounting, or other professional services. If you need assistance, we recommend consulting a qualified professional. Regarding the 2023 Retirement Contribution Limit, this information should not be considered investment, tax, or legal advice and should not be used to avoid any federal tax penalties. The 2023 Retirement Contribution Limit can significantly impact your financial planning. This is not a solicitation or recommendation to buy or sell any investment or insurance product, and should not be relied upon as such. All indices are unmanaged and do not represent any specific investment. Understanding the 2023 Retirement Contribution Limit is essential for effective retirement planning.
