Get to know how much you can contribute to a Roth IRA or Traditional IRA, 401k, and HSA for 2023!
If you max out these retirement accounts, you can make the most of compounding your investments!
-Retirement Investing 2023 Intro
-Contribution Limits 2023
-Solo 401k, SEP IRA, SIMPLE IRA
-Health Savings Account (HSA)
-Invest To Retire Comfortably
Since it’s never too early to start saving and investing for retirement, I feel strongly passionate about maximizing my retirement investments and helping my friends and family to do the same. So I hope the detailed information I put together will be helpful to your retirement investing education!
I love Roth IRAs the most because you are not forced to take a required minimum distribution (RMD) from them, unlike a Traditional IRA, pre-tax 401k, and Roth 401k.
The major benefit with the Roth IRA is you pay taxes while you are currently in a lower income tax bracket, and enjoy tax-free withdrawals during retirement. You can grow contributions and earnings tax-free with a Roth IRA so you get the tax break later!
With a Traditional IRA where you get the tax break now, you don’t pay taxes on contributions and earnings now if you are in a higher tax bracket, but pay ordinary income tax on distributions during retirement.
The 2023 annual contribution limits for either Roth IRA or Traditional IRA are: $6,500 if under 50 or up to $7,500 if over 50.
A 401k is often an employer-sponsored or workplace defined contribution plan, and some plans allow for a total maximum contribution in 2023 of up to $66,000 if under 50 or $73,500 if over 50. But 2023 the elective contribution annual limits are $22,500 if under 50, up to $30,000 if over 50. Your employer may or may not choose to match your contributions to the 401k plan.
I also show info for the Solo 401k, which is the best of all worlds, and the SEP IRA (Simplified Employee Pension Individual Retirement Account), and SIMPLE IRA (Savings Incentive Match Plan for Employees Individual Retirement Account) for either the self-employed and/or small business owners.
A Health Savings Account (HSA) is the best of all worlds because it is triple tax-advantaged, where you get to do tax-free: 1) contributions, 2) qualified medical expense withdrawals, & 3) investment earnings growth!
If you max out your retirement contributions across the Roth IRA ($6,500), 401k ($22,500), and HSA ($3,850) that is already $32,850 you could be socking away toward retirement if you’re under 50! You could be putting away more than $41,000 if you’re over 50 across these accounts depending on if you have an individual or family HSA in addition to doing catch-up contributions.
So go out and save for retirement because millions of dollars are waiting for you to compound them!
If you’re interested in learning how to take control of your finances and start becoming an investor like Warren Buffett, check out my free PDF guide.
I look forward to making more investor friends! Add me on Instagram: michellemarki