How much can you contribute to your 401(k) in 2023? The amounts have increased significantly, so act fast to take full advantage of this change!
The best way to retire with more money is to save more. Don't get sucked into the "get rich quick" schemes. Save more today, and let the power of compounding interest take over.
Well, happy New Year, happy 2023, hopefully, your New Year is off to a great start. One of my New Year's resolutions is to make more videos, provide more good information that all of us can use to navigate whatever financial situation life throws at us.
So I'm going to be making what I'm calling "Finance Friday". I'm not sure if I want to promise to make the video every Friday, but it'll probably be on Fridays where I'll release just some quick financial tips, maybe it's new information, or maybe it's older information that isn't fully understood. So, I want to just jump right into it. I have a quick tip already for 2023, so here we go.
For 2023, one of the changes is the amount that you're able to contribute to your 401(k). Maybe you have a 403(b) or something just like it at work, but the maximum contribution amounts have changed for this year.
So last year, 2022, most people were able to contribute up to $20,500. Or if you were 50 or older, you could contribute an additional $6,500. So a total of $27,000 if you're 50 or older last year.
This year (2023), they've adjusted both of those numbers. So everybody, even below the age of 50, can now contribute $22,500. And then if you're above 50, the catch-up contribution that you're able to make is an additional $7,500. So now the total as someone who's older than 50 is $30,000 for the year that you're able to save into your 401(k).
So, it's always best just to jump on that as quick and as early in the year as you can. Maybe you got a raise from your employer or something as well and you can pack some of that away right now.
So just a quick tip, they've adjusted those numbers. If you're trying to max out your 401(k) contributions, go adjust those now, and hopefully that I'll set you up for success in the future.