January 2023
Tax Planning

401(k) and IRA Annual Limits for 2023

By: Corrina Olson

It’s a new year and with it comes new annual limits! Here are some of the changes for 2023:

  • The contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan increased $22,500 from $20,500.

  • The catch-up contribution limit for employees age 50 and over who participate in 401(k), 403(b), most 457 plans and the federal government's Thrift Savings Plan increased to $7,500 from $6,500.

  • The amount individuals can contribute to their SIMPLE retirement accounts increased to $15,500 from $14,000.

  • The catch-up contribution limit for employees age 50 and over who participate in SIMPLE plans increased to $3,500 from $3,000.

  • The limit on annual contributions to an IRA increased to $6,500 from $6,000.

  • For 2023, the IRA catch‑up contribution limit for individuals age 50 and over was not subject to an annual cost‑of‑living adjustment and remains $1,000. Starting in 2024, that limit will be indexed to inflation, meaning it could increase every year, based on federally determined cost-of-living increases.

  • The income phase-out ranges for deducting contributions to a traditional IRA increased.

  • The income phase-out range for people making contributions to a Roth IRA increased for taxpayers filing as single and married filing jointly.

With Secure 2.0 passing right before we rang in the new year, you might be wondering how that impacted these numbers for 2023. Most of the changes from Secure 2.0 will not go into effect until 2024 or later. However, one big change to be aware of for 2023 is the Required Minimum Distribution (RMD) age. Beginning in 2023, the age to start taking RMDs jumps to 73 from 72. Beginning in 2033, it creeps up again to 75.

If you have questions about any of these limits, please reach out to our office and we will be happy to look at your specific situation to determine what you are eligible for in 2023!

If you have questions, please contact us.

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