2023 Financial Planning Limits
It feels like this year it does not matter where we look, inflation is changing our financial world! At the pump, at the grocery store, at the bank, and (on a positive note) in our social security benefits. Take note of the 2023 financial planning adjustments summarized below that impact retirement & healthcare contributions, estate and gifting limits, and social security benefits.
Employer Retirement Plans
If you are trying to maximize contributions to your 401(k), 403(b) or other employer-based retirement plans, be sure to bump up your per-pay-period contributions, especially if you’re turning 50!
Contribution Limits | 2022 | 2023 | Change |
401(k), 403(b), and 457(b) plans. | 20,500 | 22,500 | 2,000 |
Catch Up (ages 50+) for 401(k), 403(b), and 457(b) plans | 6,500 | 7,500 | 1,000 |
SIMPLE IRAs | 14,000 | 15,500 | 1,500 |
Catch Up (ages 50+) for SIMPLE IRAs | 3,000 | 3,500 | 500 |
SEP-IRAs | 61,000 | 66,000 | 5,000 |
Individual Retirement Plans
Take notice of the 2022 limits as well! If you have not yet funded an IRA for the tax year 2022, and are eligible to do so, then you can contribute up until April 18, 2023.
Contribution Limits | 2022 | 2023 | Change |
Traditional and Roth IRAs | 6,000 | 6,500 | 500 |
Catch Up (ages 50+) for Traditional and Roth IRAs | 1,000 | 1,000 | - |
Health Care
Do you have a high deductible health plan? If so, you may be eligible to contribute to a Health Savings Account (HSA). These tax-advantaged accounts grow tax-deferred like most retirement savings vehicles, but come with the added benefit of tax-free distributions for qualifying medical expenses.
Health Care Savings Contribution Limits | 2022 | 2023 | Change |
HSAs (Single Coverage) | 3,650 | 3,850 | 200 |
HSAs (Family Coverage) | 7,300 | 7,750 | 450 |
Catch Up for HSAs (ages 55+) | 1,000 | 1,000 | 0 |
Estates and Gifting
Sometimes it feels better to give away your wealth now, rather than to wait until you pass away. If you are looking to do some gifting be mindful of the Annual Gift Exclusion Amount. If you go over it, you likely will not have a tax bill, but you will have to start offsetting your Lifetime Personal Exemption Amount, which is done by filing a gift tax return.
Estate and Gift Tax | 2022 | 2023 | Change |
Annual Gift Exclusion (per donor per beneficiary) | 16,000 | 17,000 | 1,000 |
Personal Exemption Amount (Single) | 12,060,000 | 12,920,000 | 860,000 |
Personal Exemption Amount (Married) | 24,120,000 | 25,840,000 | 1,720,000 |
Social Security
The 2023 cost of living adjustment will provide some much-needed relief to those who depend on their social security benefits to make ends meet. Workers are also seeing an increase in the Taxable Earning Threshold, which means that higher income workers will be making more tax payments to the social security administration.
Social Security | 2022 | 2023 | Change |
Cost of Living Adjustment | 5.9% | 8.7% | n/a |
Taxable Earnings Threshold | 147,000 | 160,200 | 13,200 |
For a full breakout on all of the changes mentioned above, be sure to check out these additional resources:
Employer Plan Changes, IRA Changes, Gift and Estate Tax Changes, HSA Changes, Social Security Changes.
Investing involves the risk of loss. Information provided is for informational purposes only. For specific planning, please seek the advice of Integris, your tax accountant, attorney, insurance agent, or other professional as appropriate.
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