We’d all like to keep more of our hard-earned money, right? There’s a way you might do that—by keeping taxes in mind as you save for retirement.

Increase deferrals into your employer’s retirement plan.

In 2023, you can contribute up to $22,500 in an employer-sponsored plan such as a 401(k).¹

You won’t pay taxes on that money until you eventually withdraw it in retirement, so you’ll lower your taxable income for the year—which means you’ll pay less in taxes today. (Some retirement plans have a lower limit, so look into the plan’s details.)

Find all the 2023 retirement contribution limits and income restrictions.

Don’t worry if you’re nowhere near being able to contribute the full limit. Even small increases over time may lower your taxable income (and potentially your tax bill) and boost your savings.

Have a retirement account sitting with a past job? You can’t contribute more to it once you’ve left your employer, but you have other options—such as moving that money to a current employer-sponsored plan or rolling it over to an IRA, so you retain more control over how it’s invested.

Contribute to an IRA.

Speaking of IRAs, did you know that contributions to a traditional IRA are also made on a pre-tax basis (for those eligible to deduct their contribution) and therefore lower your taxable income, similar to 401(k) contributions? Roth IRAs work a little differently, helping you potentially save on taxes when you withdraw money in retirement. In 2023, you can contribute up to $6,500 to an IRA.¹ 
Learn more about IRAs.

Make catch-up contributions.

If you’re age 50 or older and still working, you can contribute an additional $7,500 to a 401(k) plan or 403(b) plan or $1,000 to an IRA beyond those standard limits.¹ This not only lowers your taxable income (noticing a theme?) but also helps you fill in the possible savings gap if you got a late start saving for retirement.

Want to know more? Learn how catch-up contributions work.

See if you’re eligible for the Saver’s Tax Credit.

If you fall within certain income ranges, aren’t claimed as a dependent on someone else’s taxes, and contribute to an employer-sponsored retirement plan or an IRA, you may be eligible for the Saver’s Tax Credit. The specific amount depends on your income but could be up to $2,000 for single filers or $4,000 for joint filers. Check out the details at IRS.gov.