3 Retirement Changes to be Aware of in 2023

Written By: Ryan Rinehart, Financial Advisor

As 2022 comes to an end, it’s time to start planning for 2023. If you’re someone that’s retired or approaching retirement you’ve probably learned by now there are a lot of moving parts and changes when it comes to retirement, and these changes can make planning for a new year more complicated than you would hope. So today I want to discuss the three changes we are seeing in the retirement landscape and make sure you are aware of them as you head into 2023. 

  1. IRA Contribution Change

If you’re someone with earned income and not contributing to an employer retirement plan, you may have an Individual Retirement Account (IRA). When contributing to an IRA there is a maximum contribution you’re allowed each year and in 2022 that amount was $6,000. However, in 2023 we are seeing an exciting change where they are now allowing an additional $500, making the maximum contribution for an individual $6,500. For individuals that are age 50 and over that are allowed an additional $1,000 in contribution, that amount remains unchanged, meaning you can contribute up to $7,500 in 2023. 

  1. 401(k) Limits 

If you currently work for an employer that offers a 401(k) plan, you’ll want to be aware of this change. As I discussed above with IRAs, 401(k)s also have contribution limits per year, and just like IRAs that amount also is increasing in 2023. In 2022 the limit was $20,500, and now in 2023 it is increasing up to $22,500. This is great news for those of you that have wanted to save a little more into your 401(k)! If you’re 50 and older you can make special catch-up contributions, and in 2022 that catch-up amount was $6,500. In 2023 that will go up to $7,500. So, if you’re someone age 50 and older you will be able to contribute $30,000 to your 401(k) in 2023. 

  1. Social Security Changes 

If you are taking Social Security (SS) you’re probably not used to seeing major increases each year, however in 2023 we are seeing a cost of living adjustment (COLA) of 8.7% for Social Security payments. Meaning, on average, this will increase SS payments by $140 starting in January. As we all felt in the past year, the cost of living increased rapidly, which is why you’ll be seeing this COLA in 2023. 

While 2022 has certainly been a stressful year for retirees or those approaching retirement, it is nice to see some favorable changes that can help improve your retirement outlook. It’s important to constantly be aware of these changes throughout retirement so that you can always take advantage and plan accordingly.

This Week in History

1843 (Dec. 19) – A Christmas Carol by Charles Dickens was published in London. 

1891 –The first game of basketball was played when James Naismith decided to test the new game he invented. 

1957 (65 years ago) – 22-year-old Elvis Presley received his official draft notice for the U.S. Army while spending Christmas at Graceland, his newly purchased Tennessee mansion. He attained the rank of sergeant during his service. 

1967 (55 years ago) – The movie “The Graduate” opened in theaters. 

1972 (50 years ago) – Bob Hope gave his last Christmas show to U.S. servicemen stationed in Vietnam.

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