It might be time to increase your 401(k) contributions. The IRS announced Friday that the limit will be raised by $2,000 for 2023.
Cost of living adjustments will raise the 2023 limit to $22,500 (from $20,500) for individual contributions to 401(k), 403(b), most 457 plans, and Thrift Savings Plans.
Individuals aged 50 and up can contribute an additional $7,500, marking the first increase since 2020. This raises the total contribution limit for those aged 50 and up to $30,000.
Starting in 2023, taxpayers who already make contributions to individual retirement accounts (IRAs) will be able to put away an additional $500.
For those 50 and older, the limit rises to $6,500, plus $1,000 in catch-up contributions. The catch-up contribution limit remains unchanged from last year.
According to the report, the income limits for being eligible to contribute to a Roth IRA will be raised in the year 2023.
For heads of households and single filers, the income phase-out range for Roth IRAs will increase to $138,000–153,000 from $129,000–144,000.
For married couples filing jointly, the range rises to $218,000 to $228,000 (from $204,000 to $214,000). For married couples filing separately, the phase-out range remains $0 to $10,000.
Individuals can now contribute up to $15,500 to SIMPLE accounts (savings incentive match plan for employees), a $14,000 increase from 2022.