Empower Blog

January 17, 2023

2023 Retirement Account Contributions

Financial Planning

Retired? Saving to retire? This year brings you more money.

2023 brings a fresh start for Americans with new rules that affect those who are currently retired or saving for retirement. Required minimum distributions (RMDs) have changed and greater contributions can be made to retirement accounts. Whichever group you’re in, here are the changes (they’re good ones!) you can look forward to.


If you’re retired, you’ll have even more control over your money.


Required Minimum Distributions


President Biden signed the 2023 Consolidated Appropriations Act, which included the SECURE 2.0, an extensive piece of legislature focused on retirement plan reform. A key provision of this plan includes increasing the age for required minimum distribution (RMD). Participants are generally required to take retirement plan distributions at age 72. SECURE 2.0 increases the age to 73, beginning on January 1, 2023, and again to age 75, beginning on January 1, 2033.


In short, if you’re 73, you won’t be penalized if you choose not to take your RMD.


Catch-Up Provision for 2023


After 2024, SECURE 2.0 provides a second increase in the contribution amount if you’re 60, 61, 62 or 63 years old. For most plans, this “second” catch-up limitation is $10,000, and $5,000 for SIMPLE plans. Like the “standard” catch-up amounts, these limitations are subject to (are annually inflation adjusted) inflation adjustments.


If you’re saving for retirement, here’s how much you could potentially put away for your future in 2023.


Annual Contribution Limits


This year, if you’re participating in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan, the contribution limit has increased from $20,500 to $22,500.


Catch-Up Provision for 2023


The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan has increased from $6,500 to $7,500. If you’re 50 or older and participating in those plans you can now contribute up to $30,000.


Income & Eligibility Limits and Phase-Outs


SECURE ACT 2.0 also includes increases in the income range eligibility to make deductible contributions to traditional and Roth Individual Retirement Accounts (IRAs), and to claim the Saver's Credit. You can deduct contributions to a traditional IRA if you or your spouse was covered by a retirement plan at work. The deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither you nor your spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)


Traditional IRA phase-out ranges for 2023:

  • Single taxpayers covered by a workplace retirement plan:
    Phase-out range is $73,000 to $83,000, up from $68,000 and $78,000.
  • Married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan:
    Phase-out range is $116,000 to $136,000, up from $109,000 and $129,000.
  • IRA contributors not covered by a workplace retirement plan and married to someone who is covered:
    Phase-out range is $218,000 to $228,000, up from $204,000 and $214,000.
  • Married individuals filing a separate return and covered by a workplace retirement plan are not subject to an annual cost-of-living adjustment:
    Phase-out range remains $0 to $10,000.


Roth IRA phase-out ranges for 2023:

  • For singles and heads of household:
    Phase-out range is $138,000 to $153,000, up from $129,000 and $144,000.
  • Married couples filing jointly:
    Phase-out range is $218,000 to $228,000, up from $204,000 and $214,000.
  • Married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment:
    Phase-out range remains $0 to $10,000.


The income limit for the Saver's Credit (also known as the Retirement Savings Contributions Credit) for 2023:

  • Low- and moderate-income workers:
    $73,000 for married couples filing jointly, up from $68,000
  • Heads of household:
    $54,750, up from $51,000
  • Singles and married individuals filing separately:
    $36,500, up from $34,000.


Finally, the amount individuals can contribute to their SIMPLE retirement accounts has also increased to $15,500, up from $14,000.


Find all the details of these important updates on the IRS’s page here.


Now’s the time to review your accounts and see how these new rules affect your financial goals. If you have changed jobs a time or two over the last several years, it’s easy to lose track of various retirement plans from previous employers. Talk to a Wealth Advisor for an assessment of the options available to you with regard to these assets.

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About the Author
Professional Photo of Ron Yount
Ron Yount

Wealth Management By CommunityAmerica

Ron Yount is a Wealth Advisor. He has spent his entire career in the financial industry, beginning as a CPA and growing into financial planning. Ron truly enjoys helping members reach their dreams. His goal is to be your trusted advisor so as life happens, you can know he is there to help you through the impact of those changes and ensure you remain on track to reach your overall financial goals.
Ron understands that financial planning impacts more than just you, and he aims to help you understand how your decisions impact your family for generations to come. He strives to give advice as if you were a member of his family – looking out for your best interests.

His passion for future planning comes from his own large family. He is the proud father of eight children and five grandchildren.

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