In this video, Barney talks about the possible increases in limits for different retirement accounts and what that could mean for your future. Inflation has been at a record-high for the whole year and there is no sign of it stopping anytime soon. Given these levels of inflation, Barney talks about the possible estimations ahead of the IRS announcing the limits in November.
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00:00-00:45 Limits are Increasing!
00:45-1:18 Roth Recap
1:18-1:56 401k Recap
1:56-2:21 What is the Increase?
2:21-3:48 Difference It Makes
3:48-4:10 SUBSCRIBE!…(read more)
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The Internal Revenue Service (IRS) has announced new contribution limits for individual retirement accounts (IRAs) and 401k accounts for the year 2023. These changes will have an impact on both employees and employers who participate in retirement plans.
The Roth IRA contribution limit for 2023 has been raised to $6,000, an increase of $500 from 2022. For those who are age 50 or older, the catch-up contribution limit has been increased to $1,000, making the total contribution limit $7,000. It’s important to note that these limits apply to both traditional and Roth IRAs and are subject to income limits as well.
For 401k plans, the IRS has increased the contribution limit by $1,000 to $20,000 for 2023. The catch-up contribution limit for those who are age 50 or older has also been increased by $500 to $7,000. This means that employees who participate in 401k plans can contribute up to $27,000 towards their retirement account in 2023.
Employers who offer 401k plans to their employees should review their plan documents to ensure that they reflect the new contribution limits. Employers may also want to communicate the new limits to their employees and encourage them to maximize their contributions where possible.
It’s important to note that these changes are subject to the discretion of the IRS and may be subject to revision in the future. As such, it’s essential to stay informed about any additional changes to contribution limits.
In conclusion, the new Roth IRA and 401k limits in 2023 will provide individuals with more opportunities to save and invest in their retirement. With the rising cost of living and uncertainty about Social Security benefits, it’s essential to maximize your contributions towards retirement plans to ensure financial stability in your golden years.
The fact that the IRA limit has not increased for 4 straight years is a travesty. It should be $7500 for 2023 to be honest, just to compensate for 4 straight years at $6000.