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What are the 2023 retirement contribution limits?

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Increased 2023 retirement contribution limits make it even easier for you to save enough for retirement and benefit from valuable tax reductions at the same time. Understanding your contribution limits for the coming year can help you plan ahead to make sure you take full advantage of the benefits your retirement plan provides.

This table provides you with a quick summary of key details of 2023 retirement contribution limits. It highlights some of the features or rules unique to each plan type, including contribution limits, catch-up contributions and income limits on contributions.

IRS retirement plan contribution limits for 2023

 
Contribution limit
Catch-up contributions allowed?
Are there income limits to participate?
Traditional 401(k)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
Roth 401(k)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
Traditional 403(b)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
If you have worked at the same company for at least 15 years, you can contribute an additional $3,000 per year — this is capped to a lifetime maximum of $15,000*
Roth 403(b)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
If you have worked at the same company for at least 15 years, you can contribute an additional $3,000 per year — this is capped to a lifetime maximum of $15,000*
Traditional 457(b)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
If you are within three years of the standard retirement age, you can contribute an additional $22,500 per year for those three years
Roth 457(b)
Up to $22,500
Yes, an additional $7,500 if age 50 or older
No
If you are within three years of the standard retirement age, you can contribute an additional $22,500 per year for those three years
Traditional IRA
Up to $6,500 (or 100% of your earned income if it's less)
Yes, an additional $1,000 if age 50 or older
No
Roth IRA
Up to $6,500 (or 100% of your earned income if it's less)
Yes, an additional $1,000 if age 50 or older
Yes, your MAGI (modified adjusted gross income) must be less than $138,000 (single filer) or less than $218,000 (joint filer) to contribute the full amount. Your allowable contribution begins to phase out as your income increases above these limits. Single filers earning $153,000 and joint filers earning $228,000 cannot contribute.
SIMPLE IRA
Up to $15,500
Yes, an additional $3,500 if age 50 or older
No
SEP IRA
Your employer can contribute up to the lesser of $66,000 or 25% of your compensation.
No
No

Related requirements to keep in mind

While contribution limits must be adhered to in order to avoid penalties, those aren't the only guidelines you need to consider as you plan for your golden years. These retirement plans also have specific requirements related to required minimum distributions (RMDs) and how withdrawals are taxed:

Are there RMDs?

One of the most significant changes brought on by the SECURE Act 2.0 is the age at which you are required to begin taking minimum distributions. Beginning in 2023, the age at which you must start to take RMDs—your required beginning date (RBD)—depends on your birth year. If you were born in 1950 or earlier, you must begin RMDs at age 72. If you were born between 1951-1959, you must begin at age 73. If you were born in 1960 or after, then you must begin at age 75.

  • Traditional 401(k): You must take distributions starting at your RBD unless you're still working, the plan allows for delayed distribution and you aren't a 5% or greater owner of the business sponsoring the plan.
  • Roth 401(k): You must take distributions starting at your RBD unless you're still working, the plan allows for delayed distribution and you aren't a 5% or greater owner of the business sponsoring the plan.
  • Traditional 403(b): You must take distributions starting at your RBD unless you're still working and the plan allows for delayed distribution.
  • Roth 403(b): You must take distributions starting at your RBD unless you're still working and the plan allows for delayed distribution.
  • Traditional 457(b): You must take distributions starting at your RBD unless you're still working.
  • Roth 457(b): You must take distributions starting at your RBD unless you're still working and the plan allows for delayed distribution.
  • Traditional IRAs: You must take distributions starting at your RBD.
  • Roth IRAs: You do not need to take distributions.
  • SIMPLE IRAs: You must take distributions starting at your RBD.
  • SEP IRAs. You must take distributions starting at your RBD.

How are withdrawals taxed or penalized?

Once you qualify for a distribution from your employer sponsored plan, the following rules apply:

  • Traditional 401(k): Withdrawals are taxed as ordinary income. If you're under age 59½, you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.
  • Roth 401(k): Qualified distributions are tax-free. If the distribution isn't qualified, you'll pay taxes on the earnings portion and may owe a 10% penalty unless you qualify for an exception. Withdrawals are tax-free as long as your account is at least five years old, you have separated from the employer sponsoring the plan, and you are at least 59½. Early withdrawals are prorated between your after-tax contributions and the investment growth. Withdrawals of contributions are always tax-free.
  • Traditional 403(b): Withdrawals are taxed as ordinary income. If you're under age 59½, you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.
  • Roth 403(b): Qualified distributions are tax-free. If the distribution isn't qualified, you'll pay taxes on the earnings portion and may owe a 10% penalty unless you qualify for an exception. Withdrawals are tax-free as long as your account is at least five years old, and you are at least 59½. Early withdrawals are prorated between your after-tax contributions and the investment growth. Withdrawals of contributions are always tax-free.
  • Traditional 457(b): Withdrawals are taxed as ordinary income. No 10% early withdrawal penalty regardless of age.
  • Roth 457(b): Qualified distributions are tax-free. If the distribution isn't qualified, you'll pay taxes on the earnings portion and may owe a 10% penalty unless you qualify for an exception. Withdrawals are tax-free as long as your account is at least five years old, and you are at least 59½. Early withdrawals are prorated between your after-tax contributions and the investment growth. Withdrawals of contributions are always tax-free.

IRA rules

You always have access to your IRA assets, the following rules apply:

  • Traditional IRA: Withdrawals are taxed as ordinary income. If you're under age 59½, you may have to pay an additional 10% tax for early withdrawals unless you qualify for an exception.
  • Roth IRA: Qualified distributions are tax-free. If the distribution isn't qualified, you'll pay taxes on the earnings portion and may owe a 10% penalty unless you qualify for an exception. Withdrawals are tax-free as long as your account is at least five years old, and you are at least 59½.
  • SIMPLE IRA: Withdrawals are subject to income tax. You may also incur a 10% penalty for withdrawals made before you reach 59½ unless you qualify for an exception. This penalty is 25% if you made the withdrawal within two years of your first participation in the plan.
  • SEP IRA: Withdrawals are taxable and subject to a 10% penalty if taken before age 59½.

Planning for 2023 retirement contribution limits

Ensuring that you have enough saved for retirement is one of the most important ways to financially protect yourself and your family for the long term. In addition to benefiting you personally, it can protect those you care about—and who care about you—by preventing you from requiring financial support from them later in life.

Maximizing your retirement contribution means realizing your plan's value to the fullest extent you can. Now is a great time to review your long-term goals as well as your progress toward them.

Reach out to a local financial advisor for personalized guidance and insights. Updating your plan with the increased contribution limits in mind and striving to contribute the full amount the IRS allows means giving yourself the greatest opportunity for a secure future.

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*Also limited by previous elective deferrals to plans maintained by the employer according to the following: ($5,000 x years of service) - previous deferrals excluding age 50 catch-up. If you've fully funded your plan in prior years this may not be available.

Thrivent and its financial advisors and professionals do not provide legal, accounting or tax advice. Consult your attorney or tax professional.
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