2023 Retirement Plan Limits have been released by the IRS. If there's any constant with retirement planning, it's change. Keeping up with these changes is key to ensuring maximum benefit from your retirement plan.
At long last, there are finally changes to IRA and Roth IRA contribution limits for 2023. Additionally, 401(k), 403(b), 457 along with SEP and SIMPLE IRAs allow greater contributions than in 2022.
It's important to note that there are other limits and considerations when planning for retirement. The chart below is a summary and not a comprehensive list of all limitations. Be sure to consult a financial professional for advice on your unique situation.
2023 Retirement Plan Limits
There are other limits that may be applicable depending on your situation. As a result, you should consider potential limits on income and whether you are able to deduct contributions. For example, there are income limitations for Roth IRAs. I recommend reviewing my article ROTH IRA – 5 THINGS RETIREMENT SAVERS MUST KNOW.
The limits applicable to 401(k), 403(b), and 457 plans listed above do not include contributions made by your employer. Consequently, employer matching and profit sharing will be in addition to your elective deferral contributions. For more detailed information, you can view the IRS site here: COLA Increases for Dollar Limitations on Benefits and Contributions
Remember, when planning for retirement, pay attention to which portions are tax-deferred versus tax-free. Roth 401(k) plans are increasing in popularity. As a result, there is added confusion about how future withdrawals will be taxed.
Catch-Up contributions refer to those who are 50 years old. If you turn 50 at any point during the calendar year, you may be eligible to make additional (catch-up) contributions beyond the regular limit.
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