Plan Your 2023 Retirement Contributions

As part of your planning for next year, now is the time to review funding your retirement accounts in 2023. Recent cost of living calculations means much higher contribution limits for next year. Plus the higher income phaseouts for eligibility will make many more taxpayers eligible for fully-deductible contributions. So plan now to take full advantage of this tax benefit. Here are annual contribution limits for the more popular programs:

How to use

• Identify the the type(s) of retirement savings plans that you currently use.
• Note the annual savings limits of the plan to adjust your savings to take full advantage of the annual contributions. Remember, a missed year is a missed opportunity that does not come back.
• If you are 50 years or older, add the catch-up amount to your potential savings total.
• Take note of the income limits within each plan type.
• For traditional IRA’s, if your income is below the noted threshold, your taxable income is reduced by your contributions. The deductibility of your contributions is also limited if your spouse has access to a plan.
• In the case of Roth IRAs, the income limits restrict who can participate in the plan.

Other ideas

If you have not already done so, also consider:

• Setting up new accounts for a spouse or dependent(s)
• Using this time as a chance to review the status of your retirement plan including beneficiaries
• Reviewing contributions to other tax-advantaged plans like Flexible Spending Accounts (health care and dependent care) and prepaid medical savings plans like Health Savings Accounts.

"Tax Tips" are published to provide current tax information, tax-cutting suggestions, and tax reminders. If you would like more information on anything in "Tax Tips," or if you'd like to be on our mailing list to receive other tax information from time to time, please contact our office.
 
The tax information contained in this site is of a general nature and should not be acted upon in your specific situation without further details and/or professional assistance.
 
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Mia Verc, CPA;  Janice Papais, CPA