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davidlerner.com > Retirement Planning  > New Retirement Plan Contribution Limits 2023

New Retirement Plan Contribution Limits 2023

2023 looks to be a difficult year as inflation and the cost of living had affected everyone. Some good news is that while we are experiencing record-high inflation, Social Security beneficiaries will get an increase in their benefits next year. Another boon for Americans is that the IRS has assisted with their financial stability in the long run. The retirement plan contribution limit increases are welcome news for people saving for their retirement.

According to the IRS, in 2023 the contribution limit for employees who take part in 401 (k), 403 (b), most 457 plans, and the federal government's Thrift Savings Plan is increased by $2,500. You can now contribute $22,500.

“Saving for your retirement should be a priority and if you’re able to contribute more, you should most definitely do so,” says Richard Eden Senior vice president of David Lerner Associates. “If you have an IRA, you get an increase in your contribution limit in 2023. It goes up by $500. The limit on annual contributions is now $6500. Be aware that the IRA catch-up contribution limit for people aged over 50 hasn’t changed and remains $1000.”

If you are over 50 and want to set more money aside each month tax-free and you have a 401(k), 403(b) plan you can now contribute an extra £1000 a year. Similarly, most 457 plans and the federal government's Thrift Savings Plan now tops out at $7,500, up from $6,500.

If you take part in SIMPLE plans and want to add some extra catch-up contributions, you can add an extra $500 a year. The IRS has set the new limit for employees 50 and over at $3,500.

As 2023 becomes a reality, for those Americans who want to pay fewer taxes while getting the benefits of saving for retirement, the increase in the maximum retirement contributions for this next year is great news. For those looking to pay fewer taxes in 2023, the increase in the maximum retirement contributions for 2023 will allow you to shelter more of your income from taxes.

The new Retirement Plan Contribution Limits should give you more financial peace of mind as we face higher costs and inflation in the future. Saving more now is always a good idea if you can do so.


IMPORTANT DISCLOSURES

Material contained in this article is provided for information purposes only and is not intended to be used in connection with the evaluation of any investments offered by David Lerner Associates, Inc. This material does not constitute an offer or recommendation to buy or sell securities and should not be considered in connection with the purchase or sale of securities. 

To the extent that this material concerns tax matters, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. 

Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances.

These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable– we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice.

David Lerner Associates does not provide tax or legal advice. The information presented here is not specific to any individual's personal circumstances. 

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