The IRS has released the 2023 inflation-adjusted contribution limits into retirement plans along with phase-out ranges.
One quick note before you check out the chart below:
Make sure you take purposeful decisions around where you are putting your money. It may make sense to not put all your money into a retirement account.
Here are some considerations:
- How much access to cash do you have?
- If you don’t have 6-12 months of your gross income accessible to you, you may want to consider saving some money into savings or just a standard investment account.
- If all your money is in one style of account and taxes go in the wrong direction for you, it may not have been a great decision.
- Have your money in different tax style buckets. Meaning, some of your money in tax-deferred, some in tax-free and some in taxable. This allows for flexibility depending on where taxes go in the future.
2023 Contribution Limits
|Catch up amount (Age 50 or older)||$7,500|
|Catch up Amount (Age 50 or older)||$1,000|
Phase-out ranges and income cap (with a retirement plan at work)
If either taxpayer or their spouse is covered by a workplace retirement plan during the tax year, the maximum amount they can contribute to a traditional IRA may be reduced (phased out) to zero, depending on filing status and income.
(Note- If neither spouse is covered by a retirement plan at work, the phase-out rule doesn’t apply)
Phase-out ranges for Roth IRAs