The Internal Revenue Service announced today that young workers will be allowed to contribute up to $22500 pretax to a 401(k) ……(read more)

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The Internal Revenue Service (IRS) has announced that the limits for 401k and other retirement accounts will see significant increases in 2023, marking the largest jump in contribution limits in recent years. This is welcome news for workers who are planning for their retirement and looking to maximize their savings in the tax-advantaged accounts.

One of the most popular retirement accounts, the 401k, will see the contribution limit increase by $1,000 in 2023. This means that workers under the age of 50 will be able to contribute up to $21,000 to their 401k accounts next year, up from $20,000 in 2022. For those aged 50 and over, the catch-up contribution limit will also see an increase of $1,000, allowing them to contribute up to $28,000 in 2023.

In addition to the 401k, other retirement accounts such as individual retirement accounts (IRAs) and Roth IRAs will also see increases in contribution limits. The limit for traditional and Roth IRAs will increase by $1,000 in 2023, allowing individuals to contribute up to $7,000 per year. This is great news for those who are looking to diversify their retirement savings and take advantage of the tax benefits offered by these accounts.

These increases in contribution limits are particularly important given the rising cost of living and the uncertainty surrounding the future of Social Security. By taking advantage of these higher limits, workers can take control of their financial future and ensure that they have enough savings to live comfortably in retirement.

It’s important for workers to take advantage of these increases in contribution limits and maximize their savings in their retirement accounts. By starting early and contributing consistently, individuals can build a substantial nest egg for their retirement years. Consulting with a financial advisor can also help individuals make informed decisions about their retirement savings and create a customized plan that aligns with their goals and risk tolerance.

In conclusion, the increases in contribution limits for 401k and other retirement accounts in 2023 present a valuable opportunity for workers to boost their savings and secure their financial future in retirement. By taking advantage of these higher limits and making the most of tax-advantaged retirement accounts, individuals can set themselves up for a comfortable and secure retirement.