The IRS announced sizeable increases in the amounts of money savers can put in retirement accounts. People can contribute up to $22,500 in 401(k) accounts and $6,500 in IRAs in 2023.
Days after the Internal Revenue Service announced big inflation-related bumps to tax brackets and standard deduction payouts for 2023, the tax agency is announcing sizeable increases in the amounts of money savers can put in retirement accounts.For 401s, that’s an almost 10% increase from 2022’s contribution limit of $20,500. For IRAs, it’s a more than 8% rise from 2022’s limit of $6,000.
Older workers can save even more The 2023 contribution limits that apply to 401s — plus 403 plans, most 457 plans and the federal government’s Thrift Savings Plan — are even larger for workers age 50 and over. For 2023, a single taxpayer covered by a workplace retirement plan has a phase-out range between $73,000 and $83,000. That’s up from a range between $68,000 and $78,000 during 2022.
There are also changes coming for the Roth IRA, which people fund with after-tax money and then can tap tax-free later.The Roth IRA contribution limits also climb to $6,500. Retirement savers putting money in their 401 can’t also put pre-tax money in a traditional IRA, but they can contribute to a Roth account.
With a married couple filing jointly, next year’s phase-out range goes to $218,00 – $228,000. That’s a step up from this year’s $204,000 – $214,000 range.
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