Some years bring more changes than others. So what's new for 2023?
Below are the 2023 limits for the most popular retirement plans, including 401(k)s and IRAs.
Employer-sponsored retirement plan limits
401(k) plans: For all employer-sponsored retirement plans — like 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan — the contribution limit for 2023 is $22,500.
401(k) catch-up. The catch-up contribution limit for employees ages 50 or older who participate in the above mentioned plans remains at $7,500 for 2023. Even if you don’t turn 50 until Dec. 31, 2023, you can make the additional $7,500 catch-up provision for the current year.
IRA plans. IRA (or Individual Retirement Account) contribution limits stayed the same from 2013 through 2018. The annual limit was $5,500, and many blame this on low-inflation problems. However, the limit increased to $6,000 in 2019 and remained the same for until 2023. For 2023, the contribution limit is $6,500. The catch-up provision for IRAs is unchanged at $1,000, because it is not subject to an annual cost-of-living adjustment. This makes the maximum IRA contribution for those 50 and older $7,500 for 2023.
Traditional IRA income limits
If you or your spouse are covered by another retirement plan, IRAs have income limits beyond which their tax deductibility is phased out, until it disappears completely.
Here are the income range phaseouts for 2023 for those who are covered by another retirement plan — they apply strictly to deductible traditional IRAs:
- **Single taxpayers:**between $73,000 and $83,000
- **Married filing jointly:**between $116,000 and $136,000
- Married filing jointly: in which the spouse making the IRA contribution is NOT covered by a pension, but the other spouse is — between $218,000 and $228,000
- Married filing separately: between $0 and $10,000
Roth IRA income limits
Roth IRA eligibility is also subject to phaseout based on income, but those limits are different from what they are for traditional IRAs. The income level phaseouts for 2023 are as follows:
- Single taxpayers: between $138,000 and $153,000
- Married filing jointly: between $218,000 and $228,000
- Married filing separately: between $0 to $10,000
SEP IRA, SIMPLE IRAs, and solo 401(k) plans
There are a few changes to contribution levels for self-employed retirement plans in 2023:
SIMPLE IRA: $15,500 in 2023. The catch-up provision for taxpayers age 50 and older remains unchanged at $3,500 in 2023.
SEP IRA: Has increased to $66,000 in 2023. SEP IRA contribution maximums are based on a contribution rate of up to 25% of gross income (after subtracting the amount of the contribution itself).
Solo 401(k): Matching the employee 401(k) limits, contributions to a Solo 401(k) are the same as the SEP IRA contribution limits. They have also increased to $66,000 in 2023. The catch-up provision for taxpayers age 50 and older remains unchanged at $7,500 in 2023.
Check your retirement income
2023 retirement contribution limits table
| Retirement account | 2022 | 2023 | Change |
|---|---|---|---|
| 401(k), 403(b), or 457 plans | $20,500 | $22,500 | Increase |
| 50+ catch-up limits for above | $6,500 | $7,500 | Increase |
| Traditional IRA plans | $6,000 | $6,500 | Increase |
| Roth IRA plans | $6,000 | $6,500 | Increase |
| 50+ catch-up limit for IRAs | $1,000 | $1,000 | None |
| SIMPLE IRA | $14,000 | $15,500 | Increase |
| 50+ catch-up limit for SIMPLE IRA | $3,000 | $3,500 | Increase |
| SEP IRA | $61,000 | $66,000 | Increase |
| Solo 401(k) | $61,000 | $66,000 | Increase |
| 50+ catch-up limit for Solo 401(k) | $6,500 | $7,500 | Increase |
Retirement saver's credit changes
| Retirement account | 2022 | 2023 | Change |
|---|---|---|---|
| 401(k), 403(b), or 457 plans | $20,500 | $22,500 | Increase |
| 50+ catch-up limits for above | $6,500 | $7,500 | Increase |
| Traditional IRA plans | $6,000 | $6,500 | Increase |
| Roth IRA plans | $6,000 | $6,500 | Increase |
| 50+ catch-up limit for IRAs | $1,000 | $1,000 | None |
| SIMPLE IRA | $14,000 | $15,500 | Increase |
| 50+ catch-up limit for SIMPLE IRA | $3,000 | $3,500 | Increase |
| SEP IRA | $61,000 | $66,000 | Increase |
| Solo 401(k) | $61,000 | $66,000 | Increase |
| 50+ catch-up limit for Solo 401(k) | $6,500 | $7,500 | Increase |
When contributing to a retirement account, whether an employer-sponsored plan or an IRA, you could be eligible for a tax credit on your income tax return. This credit is an incentive targeted at low- and moderate-income workers to encourage retirement savings.
For 2023 the AGI (Adjusted Gross Income) limit for the saver’s credit (also known as the retirement savings contribution credit) is $73,000 for couples married filing jointly and $54,750 in 2023 for heads of household.
For single individuals or those married filing separately, the limit is $36,500 for 2023, up from $34,000 in 2022.
Source: [https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions] * Note: The IRS releases updated limits for the following year in October. Check back in November 2023 for the updated limits.*
