2023 Increases for Social Security Income, Retirement Plans, HSAs & IRAs
November 30, 2022 | By David Lowe
There are some bright spots amid inflation news. Social Security benefits are set to increase, and workers will be able to contribute more to their retirement accounts in 2023 than in 2022. The following details are important considerations for open enrollment and 2023 planning.
Social Security key numbers
- 8.7% cost-of-living adjustment, effective with benefits payable in January 2023
- Highest COLA percentage since 1981!
- Maximum earnings subject to Social Security tax: $160,200 (v. current $147,000)
Higher retirement contribution limits
The IRS recently announced that the maximum contribution for various investment accounts has increased for 2023.
401(k), 403(b), most 457 plans, U.S. Thrift Savings Plan
- Employee contribution limit: $22,500
- That equals $937 per paycheck if you get paid twice a month.
- Catch-up contribution for those 50 and older = $7,500
- So, the total employee contribution for those 50 and older is up to $30,000
- That equals $1,250 per paycheck if you get paid twice a month.
- Total overall 401(k) contribution limit (employee contributions + all employer contributions) = $66,000 ($73,500 including catch-up contribution)
IRA (traditional and Roth, if you fall within the eligible income limits)*
- Contribution limit: $6,500
- Catch-up contribution for 50 and older: no change – still $1,000
- So, the total contribution for 50+ is up to $7,500
SIMPLE IRA and SIMPLE 401(k)
- Contribution limit: $15,500
- Catch-up contribution for 50 and older = $3,500
- So, the total contribution for 50+ is up to $19,000
Health Savings Account (HSA)
- $3,850 single
- $7,750 total for family
- Catch-up for 55 and older: no change – still $1,000, meaning:
- Single, 55 and older may contribute up to $4,850
- Both spouses 55 and older, total family contribution up to $9,750
- One spouse under 55 and other spouse 55+, total family contribution up to $8,750
Posted in: Investing, Retirement, Tax Planning, Uncategorized
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