New Limits for Retirement Plan Contributions in 2023
Each year, we urge you to stash as much money as possible in your qualified retirement plan. Making the maximum contribution to your account is not only the best way to continue preparing for a stable retirement; you can also earn a significant savings on your federal income taxes. So why not take advantage of both opportunities at once?
And now for some even better news: In 2023, you’ll be able to contribute a bit more to your retirement plan.
The IRS regularly increases contribution limits to account for changes in the economy and how we prepare for retirement. In 2023, the annual limit on contributions to retirement accounts like 401k, 403b, Thrift Savings Plan, and most 457 plans was raised to $22,500. That means you can save $22,500 toward your retirement on a pre-tax basis (meaning you won’t owe income taxes on the amount of your contribution).
And for those aged 50 and over, the annual catch-up contribution limit for the above accounts has been raised from $6,500 to $7,500. That figure represents an additional amount that you could potentially contribute toward retirement savings, plus yet another tax advantage.
For IRAs, the annual contribution limit was raised from $6,000 to $6,500, giving those savers a little boost as well. Catch-up contributions to IRAs are not adjusted for cost of living, and so will remain at $1,000 for the year.
For information on adjusting your contributions (which is most easily done via automatic deductions from your paychecks) give us a call. We should review your savings strategy and help you contribute as much as possible to your retirement plan each year.
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In addition to managing clients’ money and giving investment and diversification advice, Mark offers something that “the other guys” don’t - a unique approach to Retirement Tax Strategies and distribution. Time and time again, Mark meets with new clients who tell him they have a great relationship with their financial advisor but have never been offered information on this kind of approach to securing their financial futures. Mark has taken this feedback to heart and works tirelessly to ensure that his strategies focus on taxes and distribution.
Mark started selling insurance for a major insurance company right out of high school to help put himself through college. After graduating with a degree in finance, he dove into estate planning on the financial side to set himself apart from other financial advisors. However, as changes were made to estate tax laws over time, Mark shifted his focus to income tax strategies.
Mark’s philosophy is “the blue prints are more important than the wall paper or carpet.” The wall paper and carpet represent products like investments and insurance policies, whereas the blue prints represent the strategies. Once strategies that truly fit the client’s needs are put in place, our focus can shift to providing you with the right products. According to Mark, “It doesn’t matter what carpet we use if the walls are not in the right place.”
Our approach to money management is designed to generate the largest alpha (quality) with the lowest standard deviation and beta (risk). By doing this, we help provide clients with the highest return on the lowest risk. Generating income for our retirees is also very important. Because withdrawing money from your portfolio hurts the account rather than helping it, our goal is to design income strategies to harm the portfolio the least making the money last longer.