2023 401k and IRA Contribution Limit Changes

One of the most important aspects of a retirement account is the tax advantage they provide.  There are a wide variety of retirement accounts available, and each has its own contribution limits and tax rules.  Some of these are income-dependent, and in 2023, retirement account limits have changed.  Here’s an overview of the changes for 2023.

How do retirement account contribution limits work?

In order to prevent tax advantages from being essentially infinite, the IRS sets limits on how much individuals can invest into certain retirement accounts each year.  The limits ensure that high-income individuals aren’t able to gain more tax advantages than an average worker.  While retirement contributions are still important, high-earners may also want to look elsewhere for additional tax savings.

Contribution limits fluctuate regularly because they are “inflation-indexed,” meaning these limits are altered based on current inflation levels. The IRS adjusts the contribution limits based on US inflation each year.  When inflation is low, contribution limits tend to stay the same.  Because of recent hikes in inflation, beginning in 2021, contribution limits were updated for 2022 and 2023.

April 18, 2023 is the deadline for making retirement account contributions for the 2022 tax year.

Precious Metals IRAs

Like other retirement accounts, a precious metals IRA allows you to invest in precious metals inside of a tax-advantaged retirement account. To hold precious metals directly, you need to open a self-directed IRA (SDIRA), which allows you more control over your retirement portfolio and the option to purchase precious metals directly. Instead of buying paper-based financial derivatives like futures or options, you can purchase metals directly like gold, silver, platinum, or palladium to save for retirement.  Precious metal IRAs come with tax benefits just like other IRAs, and are subject to the same tax rules and limitations.

What’s new for 2023?

The IRS modifies retirement account contribution and income limits annually, and for 2023 they’ve implemented changes to both the IRAs and 401(k)s. For an IRA, the contribution limit of $6,000 which existed for 2021 and 2022 has been increased to $6,500 for 2023.  This limit is for people under the age of 50.  Anyone over the age of 50 gets an extra $1,000 on top of this limit.  That “catch-up” bonus for people 50 and over has not changed for 2023.

As for a 401(k) account, the contribution limit is currently $20,500 for 2022 contributions compared to $19,500 in 2021. These changes in contribution limits also depend on the type of retirement account and the age of the contributor.

What changed in each type of retirement account?


Traditional IRAs

The most common retirement account is an individual retirement account — or IRA. An IRA allows you to save pre-tax dollars for retirement, thereby lowering your taxable income today. When withdrawing funds during retirement, they are taxed as income.  Traditional IRA contribution limits for 2023 have increased compared to the limits for 2022.  Keep in mind that it is important not to overcontribute to an IRA.

Traditional IRA 2023 2022
Contribution limit under age 50) $6,500 $6,000
Catch-up contribution limit over age 50 $1,000 (additional) $1,000 (additional)


Roth IRAs

Roth IRAs allow individuals to invest after-tax income toward retirement. (This is the opposite of a traditional IRA in which contributions are made before taxes are paid.) The benefit of paying taxes on retirement savings upfront is that your savings, and returns, can be withdrawn tax-free in retirement. Roth contribution limits increased for 2023, and the income limits did as well.

Roth IRA 2023 2022
Contribution limit under age 50 $6,500 $6,000
Catch-up contribution limit over age 50 $1,000 (additional) $1,000 (additional)
Income limit for full contribution (individual filer) $138,000 $129,000
Income limit for full contribution (joint filer) $218,000 $208,000



A 401(k) account is an employee-sponsored retirement account. It operates similar to an IRA, but your investment options are controlled by your employer, who may also contribute additional funds toward your retirement with an “employer match.” Your 401(k) may provide Traditional or Roth or both types of account options.

401(k) 2023 2022
Contribution limit $22,500 $20,500
Catch-up contribution (over age 50) $6,500 (additional) $6,500 (additional)



A Savings Incentive Match Plan for Employees (SIMPLE) IRA is another employer-sponsored retirement account. A SIMPLE IRA is often utilized by smaller employers. Contribution limits for a SIMPLE IRA tend to be lower than a 401(k) or similar employer-sponsored plan.

SIMPLE IRA 2023 2022
Contribution limit $15,500 $14,000
Catch-up contribution (over age 50) $3,500 (additional) $3,000 (additional)



A Simplified Employee Pension (SEP) IRA lets an employer contribute funds to a traditional IRA for their employees. This also serves as a retirement savings plan for self-employed individuals. In a SEP, the employee doesn’t make contributions, and instead, only the employer makes contributions to the retirement account.

SEP IRA 2023 2022
Contribution limit $66,000 or 25% of net earnings $61,000 or 25% of net earnings



Retirement planning for employees of 501(c)3 tax-exempt organizations looks slightly different. Employees of a 501(c)3 tax-exempt organization or public school can utilize a 403(b) retirement plan. Tax advantages of a 403(b) are similar to a 401(k) but may come with added benefits like shorter vesting periods and exemptions from nondiscrimination testing.

403(b) 2023 2022
Contribution limit $22,500 $20,500
Catch-up contribution (over age 50) $6,500 (additional) $6,500 (additional)



Similar to a 403(b), a 457(b) offers tax-advantaged retirement savings for employees of state and local governments (along with some select nonprofit organizations). Contributions to a 457(b) are pre-tax (like Traditional IRAs), as any earnings taxed at the time of withdrawal.

457(b) 2023 2022
Contribution limit $22,500 $20,500
Catch-up contribution (over age 50) $6,500 (additional) $6,500 (additional)


Thrift Savings Plans (TSPs)

A TSP is afforded to any federal employee and/or member of the armed forces. Resembling a 401(k) plan, a TSP offers a more limited option of investments, with only six funds available for account holders. Additionally, there are no income limits to prevent high-income earners from contributing to a TSP if desired.

TSP 2023 2022
Contribution limit $22,500 $20,500



A Health Savings Account (HSA) allows you to save money on federal income tax for medical expenses. Investments in HSAs are completely tax-free, meaning you don’t pay taxes when investing nor when you withdraw it to pay for medical expenses.

HSA accounts may be offered along with high deductible health plans by employers. According to the IRS, you can only contribute to an HSA if your minimum annual deductible is $1,500 for an individual or $3,000 for those with family coverage.

HSA 2023 2022 
Individual coverage $3,850 $3,650
Family coverage $7,750 $7,300


What does this mean for Precious Metal IRAs?

The US has seen the highest inflation in over forty years leading into and through 2022.  So it’s no wonder the IRS has increased contribution limits on individual retirement accounts for 2023. As inflation rises, more investors seek to store their wealth in safe, stable assets. This is why Precious Metal IRAs are more important than ever, as precious metals are assets that retain their intrinsic value well regardless of changing economic conditions.

Because contribution limits on IRA accounts are increasing in 2023, you will be able to contribute more tax-advantaged retirement savings into precious metals like gold, silver, platinum, and palladium. At the same time, these retirement account changes do not affect your ability to choose precious metals for your IRA.

Higher contribution limits are better for everyone with an IRA. And Birch Gold Group can help you take advantage of these higher limits with your Precious Metals IRA. Get in touch with a Birch Gold Group representative to learn more about setting up a Precious Metals IRA, rolling over an existing IRA, or opening an account today.  Request a 2023 info kit today to learn more.