The Internal Revenue Service, in its latest announcements, has shed light on the increased limits on the annual 401(k) plan and retirement account contributions.

As per the announcement, in 2023, employees will be able to put away $22,500 into their 401(k) plans, up from the current maximum of $20,500. Those aged 50 and more will be able to put away $7,500, up from the current limit of $6,500. The new limits apply to all types of retirement accounts, including 403(b)s, most 457s, and Thrift Savings Plans.

Additionally, the IRA contribution cap in 2023 is $6,500, up from $6,000 in 2022. No change will be made to the $1,000 catch-up deposit. With the increase in the phaseout range for adjusted gross earnings to between $138,000 and $153,000 for single taxpayers and $218,000 and $228,000 for married taxpayers, more Americans may be eligible to contribute to Roth IRAs.