An Upside of Inflation? Retirement Savings Limits Are Increasing Too

Nov 26

The IRS has increased the contribution limits for many retirement savings plans. For 2023, 401(k)s, 403(b)s, most 457 plans, and the Thrift Savings Plan for government employees and the armed services will see an increase to $22,500, from $20,500. The catch-up provision for savers 50 and above remains the same, $7,500, for a total of $30,000.

Adding to Savings with an IRA

While the contribution levels for IRA accounts did not increase, the phase-out ranges did get a cost-of-living bump. These determine whether and how much of your IRA contribution is tax-deductible.

For 2023, the phase-out ranges are as follows:

• For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $116,000 and $136,000, up from $105,000 to $125,000.
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered,... ...