2023 IRS Savings Limits Announced: Now is a good time to consider boosting savings! (Article)
2023 IRS Savings Limits Announced: Now is a good time to consider boosting savings!
There is good news for savers in workplace retirement plans. Next year, the savings limits are increasing due to annual inflation adjustments so savers will now be able to sock away another $2,000 in their workplace retirement account. Here are the details:
Special rules apply to those who are saving in a non-governmental 457(b) plan and who are close to retirement. During the last three years before your plan’s “normal retirement age” you may also contribute the LESSER of twice the annual limit ($42,000) or the annual limit plus amounts allowed in prior years that you didn’t contribute. See your MoneyAdvice@Work® advisor for help doing this math.
Now that the IRS has released these numbers now is a great time to review your saving rate whether you are a super saver attempting to max out or not. For those trying to contribute the max, your percentage contribution should be increased. But beware, make sure that you spread out your contributions through the entire year unless your retirement plan has a “true up provision” on their match. If you max out early and don’t have this provision in your plan, you could lose out of employer match money. If you don’t know, reach out to your MoneyAdvice@Work® advisor or work benefits team for an answer.
For the rest of us that are not maxing out these accounts consider your plan’s auto-increase feature if it is available. Many times, people can save more…we just don’t think we can or we just don’t want to. An auto-increase feature allows to you set up an automatic increase your savings annually by 1% to some upper limit allows you to increase your savings slowly but steadily. It is very likely that you won’t even notice that increase.
To make sure we are on track, reach out the MoneyAdvice@Work® team for help. We can help you determine if you are saving enough to meet your goals. Remember, our sole focus is to provide confidential financial wellness services as a workplace benefit. Our advisors are committed to coaching you through your financial journey without judgment or jargon, all within the safety of a completely sales-free and confidential environment. So, reach out today!
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