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If you’re diligently working towards your retirement savings, it’s crucial to take a moment in the remaining hours of the year to assess the contributions you’ve made to your retirement accounts. This check is vital to ensure you are on pace to meet your savings targets for 2023.

Retirement accounts come in various forms, with IRAs and 401(k) plans being among the most common. While the type of account you choose is important, what’s more critical is maximizing your contributions to these accounts. The reason for this is the unique tax advantages each account offers, making them an incredibly smart choice for anyone focused on retirement savings.

Immediate tax breaks are available for contributions to some of these accounts, and all of them offer either tax-free or tax-deferred growth (depending on whether it’s a “traditional” or “Roth” account). There’s even a special tax credit—the Saver’s Credit—that’s worth up to $1,000 ($2,000 for married couples filing a joint tax return) for low- and moderate-income retirement savers.

So, what should you do as the year winds down to make sure you’re taking full advantage of your retirement accounts? Right now, you should be focusing on two things: The limits and the deadlines for making contributions to your retirement accounts for the 2023 tax year.

So, to ensure you’re making the most of your retirement dollars, let’s go over the 2023 contribution limits and deadlines for all the most common types of retirement accounts.

401(k) and Similar Plans: In General


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A 401(k) plan is a tax-advantaged account offered by businesses to help eligible employees save money for retirement. Employees who choose to participate in the plan can contribute to their personal 401(k) account through payroll deductions. In many cases, the employer will also contribute to your account (commonly referred to as an “employer match”).

Don’t have a 401(k) plan at work? Maybe your employer offers a 403(b) or 457 plan instead. If you work for the federal government, there’s the Thrift Savings Plan. These are all similar to a 401(k) plan.

401(k) and Similar Plans: 2023 Contribution Limits


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For 2023, the maximum amount employees under 50 years old can put in a 401(k) or similar account is $22,500.

Workers aged 50 and older can also put in an additional $7,500 in “catch-up” contributions (for a total of $30,000). A special rule for 457 plan participants within three years of their full retirement age increases the catch-up contribution limit to $22,500 (i.e., double the basic max).

You also can’t contribute more than your compensation for the year.

These limits apply to all your 401(k) or similar accounts. So, for example, if you switched jobs this year and contribute to two separate accounts in 2023, the total amount can’t exceed the $22,500 or $30,000 cap.

In addition, if your employer offers a matching contribution, the combined total of employee and employer contributions to your account in 2023 can’t exceed $66,000, or $73,500 for people making catch-up contributions (other than for 457 plans).

401(k) and Similar Plans: Deadline for 2023 Contributions


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If you haven’t yet maxed out your 401(k) this year, you don’t have much time left. You only have until Dec. 31, 2023, to plunk more money in your 401(k) account for the 2023 tax year.

However, contributions to your 401(k) account are taken out of your paycheck and deposited into your account by your employer. You can’t just send money to the 401(k) plan administrator on your own and have it deposited into your account (as you can with an IRA). If you’re not sure how to have your 401(k) contribution increased, contact your employer’s HR department or the plan administrator.

IRAs: In General


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An IRA is a retirement savings account you set up on your own through a brokerage firm. You can open a traditional IRA or a Roth IRA, and each option has its own tax advantages.

You can fund your IRA with an ACH transfer from your bank or a personal check. Bank transfers can be made online through your brokerage account or you can send a check directly to your brokerage firm.

You can also roll over funds from an existing retirement account into an IRA.

IRAs: 2023 Contribution Limits


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When compared to 401(k) plans, the contribution limits are much lower for IRAs, and can even be reduced (potentially down to $0) for Roth IRA contributions if your income is too high.

For the 2023 tax year, you can only put $6,500 in an IRA if you’re under age 50. If you’re at least 50 years old, you can top that off with an extra $1,000 catch-up contribution. As with 401(k) plans, the annual limit is a combined limit that applies to all your IRAs.

This year’s annual contribution limit for Roth IRAs starts to phase out if your modified adjusted gross income is:

– $218,000 to $228,000 if your tax filing status is married filing jointly or surviving spouse

– $138,000 to $153,000 if your filing status is single, head of household, or married filing separately and you didn’t live with your spouse at any time during the year

– $0 to $10,000 if your filing status is married filing separately and you lived with your spouse at any time during the year

IRAs: Deadline for 2023 Contributions


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If you’re a procrastinator, the good news about IRAs is you actually have until April 15, 2024, to put money in an IRA for the 2023 tax year (April 17 for residents of Maine and Massachusetts).

2024 IRA Contribution Limits and Income Restrictions

But why wait? If you can swing it, the better option is to contribute to an IRA before the end of the year and start reaping the benefits of tax-deferred growth (traditional IRA) or tax-free growth (Roth IRA) right away.

WealthUp Tip: You can have both a 401(k) account and an IRA. So, if you don’t have enough time to put more money in your 401(k) plan for 2023, you can put that money in an IRA instead.

Health Savings Accounts: In General


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Health savings accounts (HSAs) are primarily used to offset medical costs now and in the future. However, once you turn 65, money in an HSA can be used for any purposes without penalty. As a result, many people use HSAs as a supplemental retirement savings account.

You must be covered under a high-deductible health plan in order to put money in an HSA. However, once funded, HSAs typically offer both a savings component and an investment component.

Health Savings Accounts: 2023 Contribution Limits


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For 2023, the HSA contribution limits are:

– $3,850 if you have self-only coverage under a high-deductible health plan (HDHP)

– $7,750 if you have family coverage under an HDHP

If you’re at least 55 years old at the end of the year, an additional $1,000 catch-up contribution is allowed.

Health Savings Accounts: Deadline for 2023 Contributions


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As with IRAs, you have until April 2024 to stash money in an HSA for the 2023 tax year. But, again, you’re losing out on tax-free growth by putting it off until then.

Solo 401(k) Plans: In General


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You can open a solo 401(k) if you’re self-employed or own a business with just one employee who is your spouse. (Solo 401(k) plans are sometimes called one-participant 401(k) plans, individual 401(k) plans, or uni-401(k) plans.)

Solo 401(k) plans are basically “regular” 401(k) plans, but as a self-employed person or small business owner you can make contributions as both an employer and an employee.

Solo 401(k) Plans: 2023 Contribution Limits


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You can contribute up to $22,500 to a solo 401(k) as an employee in 2023 if you’re under age 50, or up to $30,000 if you’re aged 50 and over.

You can also contribute up to 25% of your compensation as an employer in 2023, but the combined total of all 2023 contributions can’t exceed $66,000, or $73,500 if you’re at least 50 years old.

Solo 401(k) Plans: Deadline for 2023 Contributions


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The deadline for contributing to a solo 401(k) is a bit different than for regular 401(k) plans. You generally have until April 15, 2024 (April 17 for residents of Maine and Massachusetts), to fund a solo 401(k) for the 2023 tax year.

However, if you request an extension to file your 2023 federal income tax return, you’ll have until Oct. 15, 2024, to put money in a solo 401(k) account and have it count toward your 2023 limit.

SEP IRAs: In General


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Like solo 401(k) plans, SEP IRAs are available to small businesses owners and self-employed people. If you’re self-employed, you simply contribute to your own SEP IRA. However, if you’re a business owner with employees, you must also set up and contribute to a SEP IRA for each eligible employee. The employees can’t contribute their own money to their account, though.

In all cases, contributions are based on a percentage of the account holder’s compensation. The self-employed person or business owner sets the percentage each year. However, for business owners with employees, the contribution percentage must be the same for all eligible workers.

SEP IRAs: 2023 Contribution Limits


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The annual contribution limit for SEP IRAs is fairly straightforward. For 2023, total contributions to a SEP IRA can’t exceed $66,000 or 25% of the first $330,000 of compensation, whichever is lower.

Catch-up contributions aren’t allowed.

SEP IRAs: Deadline for 2023 Contributions


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The deadline for SEP IRA contributions is the same as the deadline for solo 401(k) deposits. For 2023 contributions, you have until April … or until Oct. if you extend the filing due date for your 2023 return.

SIMPLE IRAs: In General


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A SIMPLE IRA is another option for self-employed people and small businesses owners (generally up to 100 employees) looking for a retirement savings vehicle. Unlike SEP IRAs, both employers and employees can contribute to a worker’s SIMPLE IRA.

In fact, employer contributions are actually required with SIMPLE IRAs.

SIMPLE IRAs: 2023 Contribution Limits


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For 2023, an employer must contribute one of the following to each eligible employee’s SIMPLE IRA account:

– A dollar-for-dollar match of the employee’s contribution, up to 3% of the employee’s compensation

– 2% of the first $330,000 of the employee’s compensation

In addition, workers under 50 can contribute up to $15,500 to a SIMPLE IRA for the 2023 tax year. Catch-up contributions up to $3,500 (for a total of up to $19,000) are allowed for 2023 if you’re 50 or older.

SIMPLE IRAs: Deadline for 2023 Contributions


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When contributions are due depends on the type of contribution. As with 401(k) plans, contributions for 2023 must be made by Dec. 31, 2023. Employee contributions are made through payroll deductions (again, like 401(k) contributions). So, if you want to increase your contribution amount, contact your employer to see how that’s done.

Employers have more time to complete the mandatory contributions to their employees’ SIMPLE IRA accounts. Those contributions are due by the deadline for filing the business’s federal income tax return (including extensions) for the taxable year for which the contributions are made.

Related:

– How Much to Save for Retirement by Age Group

– Should You Max Out Your 401(k) Each Year? [Yes…and No]

About the Author

Riley Adams is the Founder and CEO of WealthUp (previously Young and the Invested). He is a licensed CPA who worked at Google as a Senior Financial Analyst overseeing advertising incentive programs for the company’s largest advertising partners and agencies. Previously, he worked as a utility regulatory strategy analyst at Entergy Corporation for six years in New Orleans.

His work has appeared in major publications like Kiplinger, MarketWatch, MSN, TurboTax, Nasdaq, Yahoo! Finance, The Globe and Mail, and CNBC’s Acorns. Riley currently holds areas of expertise in investing, taxes, real estate, cryptocurrencies and personal finance where he has been cited as an authoritative source in outlets like CNBC, Time, NBC News, APM’s Marketplace, HuffPost, Business Insider, Slate, NerdWallet, Investopedia, The Balance and Fast Company.

Riley holds a Masters of Science in Applied Economics and Demography from Pennsylvania State University and a Bachelor of Arts in Economics and Bachelor of Science in Business Administration and Finance from Centenary College of Louisiana.