Retirement Account Contribution Limits

The IRS wants you to save for retirement, but there are limits

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The Internal Revenue Service (IRS) offers savers several ways to set aside money each year, tax free, for retirement. But there are limits to the government's largesse. Regardless of which type of retirement account you choose, the fastest way to grow your nest egg is to contribute as much as possible every year.

Here's how much you can put into popular retirement accounts this year.

Key Takeaways

  • Periodically, the IRS reviews retirement account contribution limits and adjusts the amount you can put into a 401(k) or IRA based on inflation.
  • Employers often will match how much you contribute—up to the legal limits.
  • People 50 and older can put even more into a 401(k) or IRA to catch up on their retirement saving.

401(k) Contribution Limits

Perhaps the most popular​ retirement account is the 401(k) plan. Many employers that offer these work-sponsored plans will match a certain percentage of employee contributions. For example, an employer that matches up to 4% of contributions effectively allows an employee to save 8% of every paycheck for half of the out-of-pocket cost.

Money is usually contributed to a 401(k) plan before taxes are deducted from your paycheck, so you’ll pay taxes years down the road when you withdraw that money.

  2022 Contribution Limit 2023 Contribution Limit
Contributions for All Taxpayers  $20,500  $22,500
Catch-up Contributions for Taxpayers Aged 50+  $6,500 (or up to $27,000)  $7,500 (or up to $30,000)

Pre-tax contributions lower your taxable income and allow you to build the value of your 401(k) account more quickly. For example, an employee who earns $50,000 annually and contributes 5% of their income to a 401(k) will end up contributing $2,500 to their retirement account throughout the year while lowering their taxable income by that same amount.


If you want to contribute after-tax dollars, your account will be called a Roth 401(k). Since you already have paid income tax on the contributions, you won’t have to pay taxes when you withdraw the money in retirement.

If you’re self-employed and your business has no common-law employees other than your spouse, you can set up an individual 401(k) for yourself, sometimes referred to as a solo 401(k). You have a choice of contributing either pre-tax dollars (traditional) or after-tax dollars (Roth) to a solo 401(k).

IRA Contribution Limits

There are four main types of Individual Retirement Accounts (IRAs): traditional IRA, Roth IRA, SIMPLE IRA, and SEP-IRA, .


The deadline to make contributions to an IRA for a tax year is the filing deadline the following April (for tax year 2022 the deadline is April 18 in 2023).

  2022 Contribution Limit 2023 Contribution Limit
All Taxpayers $6,000 $6,500
Catch-up Contributions for Ages 50+ $1,000 (up to $7,000) $1,000 (up to $7,500)

Traditional IRAs are funded with pre-tax dollars, while Roth IRAs are funded with after-tax money. You’re allowed to contribute to up to $6,000 in 2022 to your traditional IRA and Roth IRA accounts and up to $6,500 in 2023. For people with both accounts, the contribution limit applies to your total annual contributions across both accounts. If you’re 50 or older, you can chip in an extra $1,000 on top of that limit.

For example (using 2022 limits):

  • If Sally, 25, contributed $6,000 to her Roth IRA, she is not allowed to contribute anything to her traditional IRA in that same year.
  • John, 57, could contribute $2,500 to his Roth IRA and $4,500 to his traditional IRA.
  • Benny, 44, could contribute $5,999 to his Roth IRA and $1 to his traditional IRA.

IRA contributions are tax deductible up to the contribution limits for most taxpayers, unless the taxpayer is covered by a workplace retirement plan. If the taxpayer (or their spouse) is covered, deductions begin to phase out at certain incomes until they are phased out altogether, depending on filing status:

Filing Status Tax Year 2022 Phaseout Start Tax Year 2022 Phaseout End Tax Year 2023 Phaseout Start Tax Year 2023 Phaseout End
Single Covered by Workplace Plan $68,000 $78,000 $73,000 $83,000
Married, Covered by Workplace Retirement Plan $109,000 $129,000 $116,000 $136,000
Married, Spouse Covered by Workplace Plan $204,000 $214,000 $218,000 $228,000
Married, Filing Single  $0 $10,000 $0 $10,000

SEP and SIMPLE IRA Contribution Limits

You can establish traditional or Roth IRAs by yourself, but only your employer can set up an SEP-IRA for you. SEP stands for "simplified employee pension." SEP-IRAs are typically used by self-employed individuals or small business owners. Employer contributions to an SEP-IRA cannot exceed the lesser of 25% of an employee's wages or $61,000 in 2022 and $63,000 in 2023.

SIMPLE IRAs are designed for small businesses with 100 or fewer employees. SIMPLE stands for "savings incentive match plan for employees" and contributions are made with pre-tax dollars. The contribution limit for 2022 is $14,000; this increases to $15,500 in 2023. Savers 50 or older can contribute up to an additional $3,000 in 2022 and $3,500 in 2023.

Frequently Asked Questions (FAQs)

Are IRA contributions the same as 401(k)?

Individual Retirement Accounts (IRA) and 401(k)'s are similar in a lot of ways. The major difference is that a 401(k) is sponsored by an employer, who may also match employee contributions to the account. Both offer tax-advantaged ways to save for retirement, and a variety of ways to invest those contributions.

Can I contribute to both a SEP-IRA and traditional IRA?

Yes, you may contribute to both a SEP-IRA (or any other employer-sponsored retirement plan) and your own traditional (or Roth) IRA. Note that you will be subject to deductible contribution limits on your IRA based on your income.

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  1. IRS. "401(k) Limit Increases to $22,500 for 2023, IRA Limit Rises to $6,500."

  2. IRS. "IRA Contribution Limits."

  3. IRS. "SEP Plan FAQs."

  4. Internal Revenue Service. "SIMPLE IRA Plan."

  5. IRS. "IRA FAQs."

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