You can save more in 2023

Inflation has increased the cost of living. But it has also ratcheted up how much you can save in tax-advantaged accounts.

- By Sandra Block

The IRS adjusts a broad array of tax provisions annually to account for inflation. Because inflation has been running hot in 2022, you’ll be able to contribute more to tax-advantaged retirement accounts in 2023. Here’s the rundown:

Retirement accounts. As Kiplinger’s went to press in mid October, the IRS hadn’t announced 2023 contribution limits for tax-advantaged retirement accounts, but employee benefits consultant Mercer projects that the IRS will allow savers to stash up to $22,500 in 401(k) and other employee-sponsored plans, up from $20,500 in 2022. The catchup contribution for workers 50 and older is expected to increase to $7,500, up from $6,500, which means those workers will be able to save up to $30,000 in their plans in 2023.