Big Changes Coming to Retirement Accounts in 2023
Retirement accounts, such as 401(k) plans, IRAs and Roth IRAs, are about to undergo some major changes in 2023. On Friday, December 18th, 2020, lawmakers announced a new set of rules that will rescue these funds from tax penalties and promote more college savings. While some see this measure as a tax break for the rich, the new rules are meant to benefit all savers. In this article, we review the new rules, the different Retirement accounts available, and discuss the 10 best Roth IRA stocks to buy according to hedge funds.
Beginning in 2023, direct Roth IRA contributions will be allowed as long as you have a Modified Adjusted Gross Income (MAGI) of less than $138,000 if you file as an individual or $206,000 if you file jointly with a spouse. This is a significant increase from the current MAGI limit of $124,000 for individuals and $196,000 for those filing jointly. This means that more people will be able to open a Roth IRA and take advantage of tax-free growth and withdrawals.
In addition, the contribution limit for Roth IRAs will increase from the current limit of $6,000 to $7,000 per year for individuals under the age of 50 and from $7,000 to $8,000 for those over 50. This is great news for savers who want to take advantage of more tax-free growth.
Catch-up contributions to Retirement savings accounts like IRAs and 401(k)s will also increase. The 2022 contribution limit for a SIMPLE IRA or 401(k), for example, will be $19,500, up from $19,000 in 2021. This will allow those close to Retirement age to save more money for their Retirement.
For those just starting to save for Retirement, there are a variety of account types to choose from. A few of the most popular account options include traditional or Roth individual Retirement accounts (IRAs), brokerage accounts, a SEP IRA, or a 401(k). Each type of account offers different benefits and tax advantages, so it’s important to evaluate your options carefully to find the best fit for your needs.
One of the best ways to invest for Retirement is to buy Roth IRA stocks. In this article, we discuss the 10 best Roth IRA stocks to buy according to hedge funds. If you want to see more stocks in this selection, make sure to check out our list of the 5 best gold IRA companies for precious metals invest.
No matter which type of Retirement account you choose, it’s important to set a contribution deadline. You can make 2023 Roth IRA contributions anytime between Jan. 1, 2023, and April 15, 2024. But that doesn’t mean you should wait until the last minute. The sooner you start saving, the more you’ll have for Retirement.
The new rules for Retirement accounts in 2023 are an exciting development for savers. With increased contribution limits and more account options, savers now have more opportunities to save for Retirement. Make sure to take advantage of the new rules and start planning for your Retirement today.
