New Retirement Plan Contribution Maximums for 2023
Posted November 22, 2022
Some people like to go to the max in everything they do. Maybe you are like this or know someone who is.
“Maximizers” are the people who plan out every minute of their vacation days so that not one second is wasted. They also try everything at the dinner table and fill their glasses to the brim, where nothing but surface tension keeps them from spilling. These “maximizers” are notorious for making the most of any given situation and taking full advantage of every opportunity that is put in front of them.
But at the end of the day, even the “maximizers” hit capacity. Maybe their social battery has run out, they’ve eaten until their pants are too tight, or the sun is setting, and it’s time to call it a day.
You can find ways to maximize any situation until you hit capacity. The same is true for many of your financial investments.
The Internal Revenue Service (IRS) recently announced the 2023 cost-of-living adjustments affecting maximum contributions for 401(k) plans, pension plans, and other retirement-related items.
Those who participate in 401(k) plans can now contribute a maximum of $22,500, up from $20,500. Others aged 50 and older can also take advantage of the “Catch-Up” contribution of an additional $7,500 for a total 401(k) contribution of $30,000.
People participating in SIMPLE IRA plans can contribute up to $15,500 for 2023, up from $14,000. Individuals aged 50 and older can also take advantage of the “Catch-Up” contribution of an additional $3,500 for a total 401(k) contribution of $19,000.
Individuals can also contribute to an Individual Retirement Account (whether you can deduct that contribution depends on several factors like income level and access to a 401(k)). The IRA contribution limit for 2023 increases to $6,500 for taxpayers under 50 and $7,500 for those aged 50 and older.
If you are a “maximizer” looking to maximize your 401(k) or IRA contributions in 2023, it’s essential to know where the limit is. As your partner in prosperity, we are here to keep you informed, educated, and empowered to make the right decisions for your financial future.
You can click here to read the complete IRS notice and see additional cost-of-living adjustments regarding retirement contribution limits. We’d love to talk if you have additional questions about your portfolio, retirement savings plan or how else we can help you reach your financial goals. Visit our website today to schedule a consultation with the Thayer Financial team.
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