{"id":2989,"date":"2022-12-20T14:58:32","date_gmt":"2022-12-20T19:58:32","guid":{"rendered":"https:\/\/www.thewealthguardians.com\/staging\/3023\/?p=2989"},"modified":"2022-12-20T15:00:00","modified_gmt":"2022-12-20T20:00:00","slug":"irs-increases-401k-limit-by-record-amounts","status":"publish","type":"post","link":"https:\/\/www.thewealthguardians.com\/staging\/3023\/irs-increases-401k-limit-by-record-amounts\/","title":{"rendered":"IRS Increases 401(k) Limit by Record Amounts"},"content":{"rendered":"

<\/p>\"\"As inflation soars, you can now save a lot more for your retirement<\/em>\n

On October 21st<\/sup>, the Internal Revenue Service announced that the amount individuals can contribute to their 401(k) plans in 2023 has increased to $22,500, up from $20,500 for 2022. The IRS also issued technical guidance regarding all of the cost\u2011of\u2011living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023.<\/p>\n

Highlights of Changes for 2023<\/strong><\/p>\n

The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government\u2019s Thrift Savings Plan is increased to $22,500, up from $20,500.<\/p>\n

The limit on annual contributions to an IRA increased to $6,500, up from $6,000. The IRA catch\u2011up contribution limit for individual aged 50 and over is not subject to an annual cost\u2011of\u2011living adjustment and remains $1,000.<\/p>\n

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government\u2019s Thrift Savings Plan is increased to $7,500, up from $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government\u2019s Thrift Savings Plan who are 50 and older can contribute up to $30,000, starting in 2023. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans is increased to $3,500, up from $3,000.<\/p>\n

The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Accounts (IRAs), to contribute to Roth IRAs, and to claim the Saver\u2019s Credit all increased for 2023.<\/p>\n

Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer\u2019s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)<\/p>\n

Here are the phase\u2011out ranges for 2023:<\/p>\n