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IRA Contribution Limits for 2023 vs. 2022

Here’s how much you can save for retirement in traditional IRAs and Roth IRAs


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Individual retirement accounts (IRAs) are one of the most popular tools for building retirement savings. More than 40 percent of U.S. households have an IRA, according to the Investment Company Institute. 

But each year, the IRS adjusts the rules for IRA eligibility based on inflation. In 2023, those adjustments will make a big difference in who can contribute to a Roth IRA, and who can deduct contributions to a traditional IRA from their taxable income.

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For both traditional and Roth IRAs, you can contribute up to $6,500 for 2023, up from $6,000 in 2022. Retirement savers age 50 and older can chip in an extra $1,000 a year as a catch-up contribution, so $7,500 in all. A person who turns 50 this year and starts contributing can sock away $112,500 in an IRA by age 65, not including any investment returns on the principal; a couple could save $225,000.

Starting with the 2024 tax year, the catch-up cap will be indexed to inflation, meaning people 50-plus can save more as the cost of living goes up. From 2025 on, IRA owners ages 60 to 63 will be able to make larger catch-up contributions: up to $10,000 or 50 percent more than the age-50 maximum, whichever amount is larger. Both provisions are part of the SECURE 2.0 Act, a set of measures designed to promote retirement saving that Congress passed in late 2022.

Traditional IRAs

traditional IRA allows you to deduct your contribution from your income, which can reduce your taxes and make it easier on your budget to save. 

For example, suppose you’re in the 24 percent federal income tax bracket. To save $7,500 for retirement in a fully taxable account, you would have to earn about $9,868 before taxes. 

With a traditional IRA, however, you can deduct that $7,500 contribution, meaning that to get $7,500 to invest, you only have to earn $7,500. (You can only contribute earned income to an IRA; investment income and Social Security benefits don’t count.)

If you (or your spouse) don’t have a retirement plan of any kind, you can take the full deduction for an IRA. If you do have a retirement plan available from your employer — even if you don’t take advantage of it — your ability to deduct a traditional IRA contribution is limited by your income.

Traditional IRAs — 2022 vs. 2023 deduction limits

Filing status 2022 MAGI 2023 MAGI Deduction
Single or head of household $68,000 or less $73,000 or less Full deduction
  $68,001 - $77,999 $73,001 - $82,999 Partial deduction
  $78,000 or more $83,0000 or more No deduction
       
Married filing jointly or qualified widow(er) $109,000 or less $116,000 or less Full deduction
  $109,001 - $128,999 $116,001 - $135,999 Partial deduction
  $129,000 or more $136,000 or more No deduction
       
Married filing separately Less than $10,000 Less than $10,000 Partial deduction
  $10,000 or more $10,000 or more No deduction
Source: IRS

You can’t avoid paying taxes on your traditional IRA contributions, as well as any investment gains, forever. When you start taking withdrawals after age 59½, they are taxed as income at your regular tax rate. (If you take money out before age 59½, it is considered an early withdrawal and in most cases you’ll pay an additional 10 percent tax penalty.)

For example, if you are in the 24 percent tax bracket and you take out $7,500, you’ll get $5,700 after federal income taxes. 

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If you are younger than 59½, you’ll owe another $750 to the IRS.  

Starting at age 73, you must take a minimum amount annually from a traditional IRA. This required minimum distribution (RMD) is calculated by the IRS based on your account balance and life expectancy and it, too, is taxable.

Roth IRAs

Contributions to a Roth IRA aren’t deductible, but you pay no taxes when you withdraw your contributions at any age, because the money is taxed before it goes into the account. And if you make a qualified withdrawal after you hit age 59½, you pay no taxes on your investment earnings, provided the Roth account is at least five years old. There are no RMDs for Roth IRAs.

There’s one catch: Your ability to make contributions to a Roth IRA are limited by your federal income tax filing status and your modified adjusted gross income (MAGI), which is your adjusted gross income on your 1040 or 1040-SR tax form minus certain deductions, such as student loan interest.

The table below shows the income limits for 2023 for making Roth contributions. As with traditional IRA contribution limits, the Roth income limits are adjusted for inflation each year.

Roth IRA — 2022 vs. 2023 contribution limits

Filing status 2022 MAGI   2023 MAGI       Contribution
Single or head of household Less than $129,000       Less than $138,000   Full contribution
  $129,000 - $143,999   $138,000 - $152,999   Partial contribution
  $144,000 or more   $153,000 or more   No contribution
           
Married filing jointly or qualified widow(er) Less than $204,000   Less than $218,000   Full contribution
  $204,000 - $213,999   $218,000 - $227,999   Partial contribution
  $214,000 or more   $228,000 or more   No contribution
           
Married filing separately Less than $10,000   Less than $10,000   Partial contribution
  $10,000 or more   $10,000 or more   No contribution
Source: IRS

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