Your 2023 Contribution Limits

Your 2023 Contribution Limits

Your 2023 Contribution Limits

2022 has almost come to an end. Can you believe it? For me — and many others — it’s been a year of getting back to normal. Not as much of a “new normal” as I thought the future would be during the pandemic, but certainly more normal than much of 2020 and 2021.

As I look back and embrace these changes — with the benefit of hindsight — I’m also looking forward to what 2023 will bring. And after this year’s economic downs and ups … and downs … some things will indeed be up in 2023: Contribution limits! Let’s have a look.

Retirement

If you’re saving for financial independence via retirement savings, check out these increased contribution limits.

IRAs and Roth IRAs

The maximums are up! Since 2019, we’ve been familiar with a $6,000 IRA and Roth IRA maximum contribution. For 2023, that limit is increasing by $500 to a $6,500 max. For those turning 50 or older in 2023, the catch-up contribution remains the same at $1,000.

401(k)s, 403(b)s, 401(a)s

Those saving in their employers’ plans might also be happy to see another increase. In fact, it’s the largest increase ever! And if you were excited last year knowing that the $19,500 maximum in 2021 was increasing to $20,500 in 2022, you just might be elated to learn that the 2023 max is up a whopping $2,000 to $22,500.

For the turning 50-and-better crowd, your catch-up contribution is also increasing by a cool $1,000 to $7,500, meaning you can sock away a whopping $30,000 in 2023. That’s $3,000 more than this year!

If you saw or will be receiving a raise or a cost-of-living adjustment to your salary, why not stash it away? This can help you avoid lifestyle creep while adding to your retirement coffer. 

SIMPLE IRAs

Last but certainly not least in our roundup of retirement savings ceilings increasing is SIMPLE IRAs. Those with SIMPLEs can add an extra $1,500 to their IRAs next year as the 2022 maximum of $14,000 is up to $15,500 for 2023.

Retirement accounts aren’t the only limits that are headed upward in 2023. 

Health Savings Accounts (HSAs)

Although some savvy savers are also using their HSAs as bonus retirement-savings vehicles, all HSA contributors should know about these increases. While they’re not as grand as some of the retirement-focused contribution limit bumps, those with HSA-eligible high-deductible health plans (HDHPs) can up their contributions in 2023. 

Individual limits are going up by $200, from 2022’s $3,650 to $3,850 in 2023. And those with family plans get a $450 increase as they can contribute $7,750 in 2023, a boost from the $7,300 limit in 2022. 

And for those turning 55 or older in 2023? Your catch-up limit is still $1,000.

Take It to the Limit

Are you ready to maximize your savings this year? Here’s your quick guide to scheduling your contributions to reach your limits in 2023.

IRAs and Roth IRAs

If you’re not ready to make a lump-sum contribution early in the year or you want to take advantage of dollar-cost averaging, you can space out your contributions. 

Under 50

To avoid over- or under-contributing by a few pennies, you could break down your contributions like so:

$1,000 contribution in January

$500 contributions February through December

50 or Older

For smooth contributions throughout the year, $625 per month will get you to the max.

401(k)s, 403(b)s, 401(a)s

Under 50

Monthly: $1,875 per pay period

Semimonthly (24 pay periods per year): $937.50 per pay period

Biweekly (26 pay periods per year): $865.39 per pay period

50 or Older

Monthly: $2,500 per pay period

Semimonthly (24 pay period per year): $1,250 per pay period

Biweekly (26 pay periods per year): $1,153.85 per pay period

SIMPLE IRAs

Under 50

Monthly: $1,166.67 per pay period

Semimonthly (24 pay period per year): $583.34 per pay period

Biweekly (26 pay periods per year): $538.47 per pay period

50 or Older

Monthly: $1,291.67 per pay period

Semimonthly (24 pay period per year): $645.84 per pay period

Biweekly (26 pay periods per year): $596.16 per pay period

Health Savings Account (HSAs)

Under 55: Individual

Monthly: $320.84 per pay period

Semimonthly (24 pay period per year): $160.42 per pay period

Biweekly (26 pay periods per year): $148.08 per pay period

Under 55: Family

Monthly: $645.84 per pay period

Semimonthly (24 pay period per year): $322.92 per pay period

Biweekly (26 pay periods per year): $298.08 per pay period

55 or Older: Individual

Monthly: $404.17 per pay period

Semimonthly (24 pay period per year): $202.09 per pay period

Biweekly (26 pay periods per year): $186.54 per pay period

55 or Older: Family (not counting your spouse’s additional contribution, if eligible)

Monthly: $729.17 per pay period

Semimonthly (24 pay period per year): $364.59 per pay period

Biweekly (26 pay periods per year): $336.54 per pay period

Did you notice the many “jumps” this year after small increases in previous years? While they might not leave you jumping for joy, it’s always nice to save a bit more for future you — or just to have a nice tax advantage in the meantime.

If we didn’t cover an increase you were wondering about, reach out to hello@fpfoco.com or find a time to meet. We’ll also help you figure out the best way to contribute — and how much — if you’re adding to employer retirement accounts throughout the year or if you don’t have funds available to reach the max right away. 

Happy (almost) New Year!

Not a client yet? See if our ensemble approach is right for you.

Head to our Comprehensive Services page to learn more about what we do for our clients.

Regina Neenan
regina@fpfoco.com

Regina Neenan is a CERTIFIED FINANCIAL PLANNER™ professional and the Director of Cash-Flow and Insurance Planning at Financial Planning Fort Collins. With a lifelong passion for personal finance, they have been serving FPFoCo clients since 2018. You can learn more about Regina on our About page.



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ANNUAL FEE
Assets Under Management Fee as a % of AUM
$100,000 - $249,999 1.00%
$250,000 - $499,999 0.90%
$500,000 - $999,999 0.80%
$1,000,000 - $1,999,999 0.65%
$2,000,000 or more 0.50%

inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
MINIMUM ACCOUNT SIZE
There is a minimum initial investment of $100,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities.

Minimums do not apply to inStream proactive financial planning as a stand-alone service.
ANNUAL FEE
Assets Under Management Fee as a % of AUM
$100,000 - $249,999 1.00%
$250,000 - $499,999 0.90%
$500,000 - $999,999 0.80%
$1,000,000 - $1,999,999 0.65%
$2,000,000 or more 0.50%

inStream proactive financial planning as a stand-alone service: $1,000/year or $100/month
MINIMUM ACCOUNT SIZE
The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds. Invest:FOCO is currently available for Individual, Joint, Traditional IRA, and Roth IRA registrations.
ANNUAL FEE
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MINIMUM ACCOUNT SIZE
The minimum initial investment for the Invest:FOCO platform is only $5,000 per account. This minimum can be met via transfer of an existing account or with new funds.
ANNUAL FEE
0.65% of assets under management ($65 per $10,000 managed)
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Invest:FOCO clients are eligible for a 10% discount on income tax preparation services offered through Fort Collins Tax Service, LLC. This discount applies to the base cost for return preparation as well as Schedules B & D. More details can be found here.
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There are no minimums when utilizing inStream proactive financial planning as a stand-alone service.

When investment management services are desired, there is a minimum initial investment of $125,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. A client household may generally include accounts for a head of household, a significant other, dependents, and any controlled organizations or entities. inStream proactive financial planning is then included at no additional cost.
ANNUAL FEE
inStream proactive financial planning as a stand-alone service: $1,250/year or $125/month

Assets Under Management Fee as a % of AUM
$125,000 - $249,999 1.00%
$250,000 - $499,999 0.90%
$500,000 - $999,999 0.80%
$1,000,000 - $1,999,999 0.65%
$2,000,000 or more 0.50%
TAX PREPARATION
Strategy:FOCO clients are eligible for a 50% or 100% discount on income tax preparation services offered through Fort Collins Tax Service, LLC. This discount applies to the base cost for return preparation as well as Schedules B & D. More details can be found here.
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Stay in the loop with our Monthly Economic Update. It's a great way to catch up on the things effecting your financial plan in an easy to read and relatable format.

We promise to only use your name and email address for sending our Monthly Economic Update. We will not sell, rent, lease, loan, or use your name or email address for any other purpose, internally or externally. You can easily unsubscribe at any time.
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Minimums do not apply to always-on, real-time financial planning as a stand-alone service.

For investment management services there is a minimum initial investment of $125,000 per Strategy:FOCO client household. This minimum can be met via transfer of existing accounts or with new funds. Investment management fees are generally debited from the accounts to which they apply. Financial planning services are included for Strategy:FOCO investment management clients at no additional charge.
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Always-on, real-time financial planning as a stand-alone service:  $125/month or $1,250/year

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FINANCIAL PLANNING
Financial planning services are ongoing, and include unlimited phone, email, web and in-person meeting and consultation time. Pricing is based on the unique circumstances of each client situation. Generally, there is a one-time plan development fee ranging from $500 - $2,000 and a monthly fee of $150 - $500; cancel anytime. Clients utilizing investment management services with portfolios of $500,000 or more will typically receive financial planning services for no additional fee.
INVESTMENT MANAGEMENT
Assets Under Management (AUM) Annual fee as % of AUM or flat-dollar
$0 - $249,999 1.00%
$250,000 - $499,999 0.90%
$500,000 - $999,999 0.80%
$1,000,000 - $1,999,999 0.65%
$2,000,000 - $2,999,999 0.50%
$3,000,000 - $3,999,999 $15,000
$4,000,000 - $4,999,999 $20,000
$5,000,000 or more $25,000 + $2,000 per additional $1mm
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Your fee is determined by the complexity of your needs and situation. The primary proxy we use for complexity is your investable net worth, which is generally your total net worth, excluding your primary residence. Your investable net worth includes the value of cash, bonds, stocks, mutual funds, rental real estate, and other business or financial interests. This aligns with the holistic nature of our comprehensive services. You can use the chart below to estimate your fee based on your investable net worth. In some circumstances, your fee may be more than the minimums in the chart below.
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Your fee is determined by the complexity of your needs and situation. The primary proxy we use for complexity is your net worth, which is the value of what you own — including cash, bonds, stocks, mutual funds, real estate, and other business or financial interests — minus what you owe. Our transparent, flat-dollar pricing aligns with the holistic nature and value of our comprehensive services. You can use the chart below to estimate your fee based on your net worth. In some circumstances, your fee may be more than the minimums in the chart below.
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Unless there is truly unique or extraordinary complexity associated with a client’s situation and financial circumstances, our fee will be based on the market value of the assets under management (AUM) for investment management services, subject to a minimum fee of $500 per month. The fee is blended and calculated using the following schedule. We do not require a minimum investment of any amount.
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