Save More for Retirement in 2023 — the IRS Raises the Limit

Inflation is the gift that keeps on giving this year. First, it was the reason for a huge boost to Social Security benefits in 2023. Now it’s changing how much you can stash for retirement through a 401(k) or an individual retirement account (IRA).

In 2023, people with a workplace retirement plan — 401(k), 403(b), most 457 plans and Thrift Savings Plans — can contribute $22,500. It’s the biggest increase in 401(k) contributions ever, up nearly 10% from this year’s limit of $20,500.

Whenever the IRS raises contribution limits, several other limits are raised as well. Like catchup contributions for people 50 and up: They’ll be able to save an additional $7,500 per year in workplace plans. (That’s $1,000 more than this year’s catchup maximum.)

The IRS is also increasing the contribution limits for individual retirement accounts, or IRAs. For both traditional and Roth IRAs, workers can contribute $6,500 to these accounts in 2023 — $500 more than they could save this year. The one limit that’s not changing is the extra $1,000 people age 50 can put in an IRA. It’s been that amount for more than 10 years.

Read our reporter Sarah Hansen’s story on retirement contributions, and how much the oldest workers can contribute to retirement accounts next year.

— Jill Cornfield, deputy editor

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