2023 Contribution Limits

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Even though it doesn’t feel like it sometimes, contribution limits are indexed to inflation.

Twelve-month inflation for all items ending in September 2022 has been 8.2% , so it is not surprising that the 2022 contribution limits have seen more increases than normal.

Each contribution limit uses a slightly different formula to calculate the new amounts, so some saw larger increases than others.

As always, we recommend updating your contributions to meet these new maximums.

If you are stretched thin and are thinking, “I can’t afford to save more!” You might appreciate reading our articles “Fund Your Roth IRA Even When You Can’t Afford It” and “How to Convert Taxable Savings Into Your Roth IRA.”

A Roth IRA can actually make a great place to store your emergency fund. Even though it is a retirement account, Roth IRAs have the special provision that you can always withdraw the amount you contributed for any reason and at any age. If you have the free cash, fully funding your Roth IRA is normally the right decision.

Another helpful read might be our Account Funding Priorities series to determine the design of your own savings waterfall plan.

Tax Year 2023

Account Type Requirements Contribution Limit More Reading
Traditional or Roth IRA Contribution

(subject to phaseouts, limited by wages)

Age 49 and under $6,500 Should I Fund a Roth or a Traditional Account?

Do Large Roth Conversions Require Backdoor Roth Contributions?

Change from 2022:
+$500 to the contribution limit
Catch-up contribution stays at $1,000

Age 50 and over $7,500
Employee Elective Deferral
401(k) or 403(b) plans
Age 49 and under $22,500 Choosing Between Your Employee Retirement Account Options

Is Funding My 401(k) Match Sufficient to Fund My Retirement?

Change from 2022:
+$2,000 to the elective deferral
Catch-up contribution increases by +$1,000 to $7,500

Age 50 and over $30,000
Employee Deferred Compensation
457(b) plans
Age 49 and under $22,500 There also may be special 457(b) catch-up contributions when you are 3 years prior to the plan’s specified retirement age.

Change from 2022:
+$2,000 to the elective deferral
Catch-up contribution increases by +$1,000 to $7,500

Age 50 and over $30,000
Employee Elective Deferral
SIMPLE 401(k) or IRA Plan
(with further limitations)
Age 49 and under $15,500 Change from 2022:
+$1,500 to the elective deferral
Catch-up contribution increases by +$500 to $3,500
Age 50 and over $19,000
SEP IRA Employer Contribution

401(k), 403(b), or 457 plans Employer Contribution

The smaller of: $66,000

or 25% of compensation

Can I Contribute to Both a SEP and a 401(k)?

Individual 401(k) Elective Deferral Limits and Deadlines

Service: Retirement Plan Management

Change from 2022:
+$5,000 to the limitation for defined contribution plans

Health Savings Account (HSA) Contribution Single Plan Age 54 and under $3,850 When Should You Stop Funding Your HSA?

When Partial-Year HSA Contribution Limits Don’t Apply

A Guide to HSA Qualified Medical Expenses, Contributions, and Family Plans with Adult Children

Service: Health Savings Account Advice

Change from 2022:
+$200 to base single contribution limit
+$450 to base family contribution limit

Age 55 and over $4,850
Family Plan Age 54 and under $7,750
Age 55 and over $8,750
Other Spouse Catch-Up Age 54 and under +$0 Both Spouses Can Make The HSA Catch-Up Contribution

Catch-up contribution remains at $1,000

Age 55 and over +$1,000
Annual Gift Exclusion Per Donee / Donor Combination $17,000 Gifts, Taxes, and IRS Form 709

Annual Exclusion From Gift Taxes

IRS: Frequently Asked Questions on Gift Taxes

Change from 2022:
+$1,000 to the annual limit

 

You can find the current contribution limits here: Account Contribution Limits
and
the IRS page on the same topic here: Retirement Topics – Contributions

Featured Image by Melissa Walker Horn on Unsplash

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Chief Operating Officer, APMA®

Megan Russell has worked with Marotta Wealth Management most of her life. She loves to find ways to make the complexities of financial planning accessible to everyone. She is the author of over 700 financial articles. Her most popular post is "The Complete Guide to Your Washing Machine" while one of her favorites is "Funding a 3-Year-Old’s Roth IRA."