The 2023 retirement contribution limits have been released and they are some of the largest increases in recent years. We cover what you need to know and how to take advantage of these increases in this short video. Please let us know if you have any questions or if we can help in any way!

Recap
401(k), 403(b) increased to $22,500 with a $7,500 catch up provision for those over 50 years old
Simple IRA increased to $15,500 with a $3,500 catch up provision for those over 50 years old
Traditional and Roth IRA increased to $6,500 with income restrictions and $7,500 for those over 50….(read more)

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The year 2023 promises to bring a lot of changes to the world of finance, and one of the most significant changes is the increase in contribution limits for various investment accounts. These limits define how much an individual can contribute to an account, such as a 401(k), IRA, or Health Savings Account (HSA), each year. Below we’ll break down the new contribution limits for each investment account.

– 401(k): The 401(k) contribution limit for 2023 is set to increase from $19,500 to $20,500. This means that individuals under the age of 50 can contribute up to $20,500 per year, while those over 50 can make additional catch-up contributions of up to $6,500. This increase is due to inflation adjustments.

– Traditional and Roth IRA: The contribution limit for traditional and Roth IRAs will remain at $6,000 for 2023. However, the catch-up contribution limit for individuals over 50 will increase from $1,000 to $1,500. Individuals can contribute to either a traditional IRA, a Roth IRA, or a combination of both, as long as the total contribution stays under the limit.

– Health Savings Account (HSA): The contribution limit for HSAs will increase in 2023 for both individuals and families. For individuals, the limit will rise from $3,650 to $3,700, while for families, the limit will increase from $7,300 to $7,450. For those over 55 years old, there is an additional catch-up contribution of $1,000 allowed.

The increase in contribution limits is a great benefit for investors looking to maximize their savings for retirement or medical expenses. By increasing the amount that investors can contribute, they will have more opportunities to save and increase their nest eggs for the future.

Moreover, the rise in contribution limits also means that investors will have to be more mindful of their contribution levels to avoid exceeding the limit and incurring penalties. It’s essential to consult with a financial advisor or investment professional to ensure that you are making the most of your investment accounts while staying within the contribution limits.

In conclusion, the contribution limits for 2023 are increasing for 401(k), HSA, and catch-up contributions for traditional and Roth IRAs. Investors should take advantage of these increases while also being mindful of staying within the limits to avoid penalties. By doing so, investors can make the most of their investment accounts and prepare for a more secure and comfortable financial future.