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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. We continually strive to provide consumers with the expert advice and tools needed to succeed throughout life’s financial journey. Bankrate follows a strict , so you can trust that our content is honest and accurate. Our award-winning editors and reporters create honest and accurate content to help you make the right financial decisions. The content created by our editorial staff is objective, factual, and not influenced by our advertisers. We’re transparent about how we are able to bring quality content, competitive rates, and useful tools to you by explaining how we make money. Bankrate.com is an independent, advertising-supported publisher and comparison service. We are compensated in exchange for placement of sponsored products and, services, or by you clicking on certain links posted on our site. Therefore, this compensation may impact how, where and in what order products appear within listing categories. Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range can also impact how and where products appear on this site. While we strive to provide a wide range offers, Bankrate does not include information about every financial or credit product or service. The IRS has some good news for workers who use traditional or to save for retirement. In 2023, you’ll be able to contribute an additional $500 to either account. It’s the first increase since 2019, bringing the total annual contribution limit to $6,500. Those age 50 and older can contribute an additional $1,000. The IRS also increased the income ranges on IRAs, allowing you to earn more money and still take advantage of the tax-free Roth account or the . You will also be able to thanks to the latest annual adjustments. Here’s what else you need to know.

Good news for IRA contribution limits

Workers looking to take maximum advantage of their retirement accounts will be excited that the IRS increased the annual contribution limits on IRAs by $500, bringing the total to $6,500. Those aged 50 and older can contribute an additional $1,000 as a catch-up contribution, the same amount as 2022. Maximum contributions to employer-sponsored plans got an even bigger boost to $22,500 for 2023, including popular 401(k) and . Those over age 50 can make catch-up contributions of $7,500. The contribution limit on a , another workplace plan, also increased to $15,500 from $14,000 in 2022.

Higher income limits for IRAs

The good news for savers is that the income limits are climbing — albeit modestly — for IRAs. For 2023, the limits on modified adjusted gross income (MAGI) to be eligible for a Roth IRA can be seen in the table below. FILING STATUS MAXIMUM INCOME FOR FULL CONTRIBUTION PHASES OUT AT Individual, head of household $138,000 $153,000 Married filing jointly $218,000 $228,000 In 2022, the Roth IRA limits were $129,000 to $144,000 for individuals and heads of household, and $204,000 to $214,000 for married couples filing jointly. However, if you still want to take advantage of the account, you may be able to use a , but you’ll want to be careful about the tax consequences. For traditional IRAs, the limits on MAGI for deducting contributions to an IRA have also increased in 2023. Note that these limits apply only if you and your spouse are covered by a workplace retirement plan. FILING STATUS MAXIMUM INCOME FOR FULLY DEDUCTIBLE CONTRIBUTION DEDUCTIBILITY PHASES OUT AT Individual, head of household $73,000 $83,000 Married filing jointly $116,000 $136,000 If you and your spouse are not covered by an employer plan, your contributions are fully deductible regardless of your income. Income limits are only one difference between the traditional IRA and the Roth IRA. and which account is better for investors.

Bottom line

High has increased the cost of living, so the IRS allows you to save more towards retirement because you’ll need more put away to maintain your standard of living. If you can, try to max out your employer-sponsored plans and your IRA. You might also consider a , which can be invested and comes with several tax advantages. Note: Bankrate’s contributed to an update of this story. SHARE: Bankrate senior reporter James F. Royal, Ph.D., covers investing and wealth management. His work has been cited by CNBC, the Washington Post, The New York Times and more. Brian Beers is the managing editor for the Wealth team at Bankrate. He oversees editorial coverage of banking, investing, the economy and all things money.

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