Each year in late October or early November, the IRS reviews the contribution limit for tax-advantaged retirement plans. The changes implemented by the IRS typically align with inflation for the 12 months prior.
With that said, here are the noteworthy changes to Retirement Contribution Limits that you should be aware of heading into 2023.
What does this mean for you?
If you maximize your annual retirement deferral, you should confirm that your percentage or flat-dollar contribution will continue to maximize the annual limit. If your contributions are made on a flat-dollar basis, here's how much you should contribute per pay period based on how many pay cycles your employer has.
What does this mean for you?
If you turn 50 or older in 2023, review your retirement plan deferral. For 2023, you will now be eligible for a total contribution of $30,000 ($22,500 + $7,500 catch-up). If your contributions are done on a flat-dollar basis, here's how much you should contribute per pay period based on how many pay cycles your employer has.
Those age 50 and above in 2023 will be eligible to contribute an additional $1,000.
If you are self-employed, the SEP IRA contribution limit for 2023 has increased from $61,000 to $66,000.
If you are unsure how these changes may impact you or what to do, don't hesitate to get in touch with your financial planner. Even though there are several changes to consider, you don't have to go through this alone. We are here to support you through all your financial decisions.
As the Director of Financial Planning for Spaugh Dameron Tenny, Jordan applies his academic and practical experience in the creation and maintenance of the firm’s financial plans, as well as coordinating research efforts for products and strategies that may benefit clients. Originally from Canada, Jordan came to Charlotte on a golf scholarship where he attended Queens University of Charlotte. In addition, Jordan has a Master’s degree in Wealth and Trust Management.
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