What is 401(k) contribution limit for 2023?

The 401(k) contribution limit for 2023 is $22,500, up from $20,500 in 2022. This means you can save more of your income for retirement and lower your taxable income at the same time. If you're 50 or older, you can also make catch-up contributions of up to $7,500, for a total of $30,000 in 2023.

The 401(k) contribution limit is adjusted annually based on inflation and cost-of-living changes, and the IRS announces the new limit every October for the following year.

The 401(k) contribution limit applies to all 401(k) plans, including traditional, Roth, and SIMPLE plans. However, the limit applies to your total contributions across all accounts if you have more than one 401(k) account, such as from different employers or a previous job. You can contribute up to $22,500 to all your 401(k) plans in 2023.

Contributing to a 401(k) plan is one of the best ways to save for retirement and enjoy tax benefits. If you can max out your contributions every year, you'll be well on your way to building a sizable nest egg for your golden years. Even if you can't contribute, you should save as much as possible and use employer-matching contributions. Every dollar will grow over time and help you achieve your retirement goals.