Contribution Limits 2023

2023 Contribution Limits You Need to Know

The IRS announced they are raising the contribution limits on 401(k)s and IRAs in 2023. Here’s what you need to know.

The hike in contributions limits is the result of inflation and cost-of-living adjustments. This change has come at the perfect time, with the federal government recently announcing we’ve hit the highest inflation rate in four decades. 

These changes raise the question, should you maximize your 401(k) or IRA contributions in 2023? 

401(k) Contribution Limits

Next year the annual contribution limit for 401(k)s will be $22,500. Additionally, individuals above the age of 50 will also be eligible for catch-up contributions for up to $7,500. In total, employees above the age of 50 can contribute up to $30,000 to their 401(k). For employers that offer match programs, the total annual limit is now up to $66,000. 

IRA Contribution Limits

For those who have a retirement fund outside of their employers, annual contribution limits have also increased for both traditional IRAs and Roth IRAs. In 2023, individuals can contribute up to $6,500 to their IRAs. However, catch-up contributions have not been raised for IRAs. 

Roth IRAs do have income limits, so individuals making above a specific threshold are eligible for reduced contributions. Additionally, individuals who make above the upper range of that threshold are not eligible at all. In 2023, the income phase-out range for single filers is $138,000 to $153,000. For married couples filing jointly, the range is $218,000 to $228,000. 

How much should I be contributing to my 401(k) or IRA?


When the annual contribution limit rises, many feel pressured to put more money into their retirement savings. If you’re wondering if you should be contributing more to your 401(k) or IRA, it really depends on your financial situation and what your employer might offer. For instance, if your employer offers a contribution match, your goal should be to contribute enough to earn the match. Not taking advantage of the match is basically like losing out on free money.

If you contribute enough to earn the match, and still have additional funds you wish to invest, you may want to consider opening a Roth IRA, due to the tax benefits these accounts offer. With Roth IRAs, contributions are taxed up front, so you won’t get taxed on investment gains when you take the distributions in retirement. 

It’s a basic rule of thumb that 10 – 15% of your income should go toward your retirement fund, but it’s not a one-size-fits-all answer. It ultimately depends on when you start saving, how much you earn annually and your current financial situation. 

Final Thoughts

The bottom line is you should only contribute as much as you can afford, no matter what the limits are. Oftentimes, it’s best to consult a financial professional to ensure you’re making the best financial decisions for your situation. If you’re interested in getting started on building a strong retirement plan, APO Financial can help. No matter where you are in your financial journey, we can create a plan tailored just to you. 

Schedule a call with us today to get started so your retirement can be as fulfilling as you want it to be.

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