This post is going to be short because we know you are busy. It has one action step and that is to adjust your retirement contributions for 2023 now.
The contribution limits are going up, meaning you can put more money away in 2023.
The number one mistake we see in years when the limits go up is people don’t start the adjustment in January. They wait until March or April to change their monthly contribution amounts and they spend the rest of the year trying to catch up. So, change your contributions amounts now so they start on January 1st.
Here are a few numbers that changed.
IRA contributions went up $500 in 2023 to $6500 (plus additional $1000 if you are over 50 years old). In the past it was $6000 and we told people to put away $500 per month. Now they can put $541 away each month. Start that in January.
In 2022, Simple IRA plans let the employee put $14000 away. Now the employee can put away $15,500.
401K/403(b)/457 went up to $22500 in 2023 from $20500 in 2022. That is an extra $2000 per year or $166 per month.
These may feel minor, but they make a huge impact long term. Take a few minutes and make the changes before you get busy with the holidays.
Also, two other things adjusted up so ask your CPA about them. Roth phaseout amounts went up so if you couldn’t put money in a Roth in years past, you may be able to in 2023. IRS tax brackets will adjust for 2023 so you may be able to lower your taxable amount with a little proactive planning. Call your CPA now while they are not crazy busy.
As always, we are here to help. Call us with any questions.