Recently, we discussed on this blog the move by the IRS to adjust the income tax bracketsupward in response to historic levels of inflation being experienced in the U.S.
Now, we have yet another silver lining: higher contribution limits.
In this announcement issued last month, the IRS is increasing the contribution limits for IRAs, 401ks, and many other retirement accounts. Additionally, they are also increasing the "catch up" contribution allowances for individuals 50 and older.
To summarize:
- IRA limits are increasing from $6000 to $6500
- 401k and other employer plans are increasing from $20,500 to $22,500
- "Catch up" contributions for employer plans are increasing from $6500 to $7500
"Phase out" thresholds are also adjusting upwards.
If you have any questions about your retirement savings strategy, please reach out to us!