401k Contribution Limits 2023 Married Filing Jointly
The 401k retirement plan is one of the most popular retirement savings options available to married couples who file taxes jointly. Every year, the IRS sets contribution limits for 401k retirement plans, and for 2023 the limit for married couples filing jointly is $19,500. This means that each spouse can contribute up to $19,500 to their individual 401k accounts.
The 401k contribution limit is subject to an annual cost-of-living adjustment. This means that the contribution limit may increase in future years as the cost of living goes up. If you are unsure of the contribution limit for a given year, you can always check the IRS website or ask your employer or financial adviser.
The contribution limit applies to both pre-tax and Roth contributions. This means that if you and your spouse both contribute the maximum of $19,500 each to your 401k accounts, the total contribution limit is $39,000. This is the maximum amount you can contribute in a single year to both accounts combined.
If you are age 50 or over, you can make additional catch-up contributions to your 401k. The catch-up contribution limit for 2023 is $6,500, which means that each spouse can contribute an additional $6,500 to their 401k account. This brings the total contribution limit to $45,500 for married couples filing jointly.
Catch-up contributions are separate from the regular contribution limit, so you can make the full $19,500 regular contribution plus the $6,500 catch-up contribution. This means that if you and your spouse both contribute the maximum amount to your 401k accounts, the total contribution limit is $51,000.
Why 401k Contribution Limits Matter
It's important to understand the contribution limits of your retirement savings options. By contributing the maximum amount allowed to your 401k, you can maximize your retirement savings and ensure that you have enough money to live comfortably when you retire. The contribution limit for 2023 is $19,500 for married couples filing jointly, plus an additional $6,500 for catch-up contributions if you are age 50 or over.
It's also important to take advantage of any employer matching contributions. Many employers offer a 401k matching contribution, which can significantly increase your retirement savings. Be sure to check with your employer to see if they offer this benefit.
Consider a Roth 401k
In addition to the traditional 401k, you may also want to consider a Roth 401k. The Roth 401k has the same contribution limits as the traditional 401k, but the money you contribute is after-tax rather than pre-tax. This means that when you withdraw the funds in retirement, they are tax-free. This can be a great way to save for retirement while minimizing your tax burden.
Other Retirement Options
In addition to the 401k, there are a number of other retirement savings options available. These include IRAs, SEP IRAs, and SIMPLE IRAs. Each of these has its own contribution limits and tax advantages, so it's important to research each option to determine which is best for you.
The 401k contribution limit for 2023 is $19,500 for married couples filing jointly, plus an additional $6,500 for catch-up contributions if you are age 50 or over. It's important to take advantage of this limit in order to maximize your retirement savings. Additionally, you may want to consider a Roth 401k or other retirement savings options in order to minimize your tax burden in retirement.