Ask the CFP: How Are 401(k), IRA, and Roth Limits Changing in 2023?

Welcome to this month’s Ask the CFP ®segment. This month’s question is,
how are 401(k), IRA, and Roth limits changing in 2023? 

Contribution limits for retirement plans have increased for 2023. In addition to providing more resources for your retirement, this also means potentially higher tax deductions. 

Let’s start with 401(k), 403(b), and 457 plans. Limits on these plans have increased by about 10% to $22,500. For employees aged 50 and over, an additional “catch up” contribution is allowed. That amount has increased as well to $7,500, meaning individuals 50 or older may be able to defer a total of $30,000 into their employer’s retirement plan in 2023.  

If your employer allows you to make after-tax contributions to your retirement plan, the limits may be even higher. Although pre-tax or Roth contributions may be limited to $22,500 without the catch-up, the total limit on 401(k) contributions is $66,000, plus the catch-up. Keep in mind, this increased limit of $66,000 includes ALL dollars contributed into the retirement plan – pre-tax, Roth, after-tax, and employer-match or profit-sharing dollars.  

If you aren’t sure whether your employer allows you to make after-tax contributions, just send us the Summary Plan Document for your retirement plan and we may be able to research it for you.  

Moving on to IRAs… 

Aside from employer group retirement plans, if you contribute to a traditional IRA or Roth IRA, the limit has increased to $6,500. If you’re 50 or older, the catch-up amount for IRAs remains at $1,000.  

Finally, you may have heard about Roth IRA phase-out limits that dictate who is eligible to contribute to a Roth IRA based on income. Those income limits have also increased. For 2023, individuals are completely phased out of Roth IRAs at $153,000 of modified adjusted gross income, and joint filers are phased out at $228,000. Although taxpayers making above these thresholds can’t contribute to a Roth IRA, converting IRA dollars to Roth IRA dollars is still allowed.  

Deciding how much to defer into retirement accounts and whether pre-tax, Roth, or after-tax is right for you can be complex, so speak with a qualified professional before making any changes to your plans.  

If you have a question about this topic or have a suggestion for a future Ask the CFP ®  video, please send it to Thanks for watching and we’ll see you next month. 

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