Updates to max retirement account contributions for 2023 give you more options to boost your savings.
Putting away as much as possible—in as many ways as you can—for the future may have huge long-term value. In 2023, IRS changes to max retirement account contributions make it possible to put more money in your savings.
Max 2023 retirement contribution amounts at a glance
The IRS increased 2023 contribution limits for 401(k)s, 403(b)s, and IRAs. Some retirement plans have lower limits, so check the details of your allowable contributions. Generally, your human resources or benefits department is a good place to start.
|Account||2023 contribution limit|
|Employer-sponsored plan such as 401(k), 403(b)||$22,500|
|Individual retirement account (IRA)||$6,500|
Catch-up contributions for 401(k)s and 403(b)s for people age 50 and older also increased to $7,500, but not for IRAs and Roth IRAs. Those remain at $1,000.
Tip:If your employer offers a matching contribution in its 401(k) plan, aim to set aside at least enough to get that match.
Updates to tax deduction limits and income limits for IRA and Roth IRA contributions
If you’re already contributing to a retirement savings plan at work, such as a 401(k) or 403(b), you can also contribute to an IRA. But there are some caveats.
While there’s no phase-out income limit for IRAs—generally anyone making any amount of income can open and contribute to an IRA—the same isn’t true for Roth IRAs (which are made with after-tax dollars). And if you’re hoping to deduct your IRA contributions on your taxes, income limitations apply here too. For 2023, those income ranges increased for both traditional IRAs and Roth IRAs. Get the details on IRA contribution and deduction limits on the IRS website.
Phase-out income limits
- IRA: None
- Roth IRA: Single/head of household: $138,000 to $153,000; married filing jointly: $218,000 to $228,000
Tax deduction limit
- IRA: Full, partial, or no deduction based on income level and retirement plan
- Roth IRA: Not deductible
Increased 2023 HSA contribution limits
The IRS also increased HSA contribution limits for 2023 for both individuals and families (see below). As a reminder: A health savings account (HSA) helps those with high-deductible health plans save taxes on money earmarked for medical expenses not covered by the plan. But unlike a flexible spending account (FSA), the assets you contribute to an HSA can be rolled over each year. Plus, an HSA offers a triple tax advantage: Money put in isn’t taxed and grows tax-free, and you’re not taxed when you withdraw funds for qualified medical expenses.
|Coverage type||2023 HSA limit|
- How are you progressing toward your retirement goals? Log in to your Principal account to see if you can increase your contributions. Don’t have an employer-sponsored retirement account? We can help you set up your own retirement savings.
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The subject matter in this communication is educational only and provided with the understanding that Principal® is not rendering legal, accounting, investment or tax advice. You should consult with appropriate counsel, financial professionals, and other advisors on all matters pertaining to legal, tax, investment or accounting obligations and requirements.