Did you sign up for your 403(b) before checking out all the various options?
Most people spend more time planning a vacation than they do planning for retirement.
If you work for a local school district, non-profit or a cooperative hospital service organization, you could have several options for the provider of your 403(b)-retirement plan. Unfortunately, most people don’t spend much time researching their options or know to look for which could be a costly mistake.
Some things to consider would be:
- The fees, expenses, or penalties that are associated with the 403(b) provider and the investments these use
- The difference between an annuity based 403(b) and a mutual fund based 403(b)
- You can always change your provider if you’re not satisfied with your current one.
- Use an advisor that is a fiduciary and can help you plan and manage your 403(b)
Just like we trust that our children’s education is in the right hands, shouldn’t you feel the same about your retirement?
Call or email us to set up a no cost, no obligation meeting to see if you’re on the right track for your retirement!
2023 Contribution Limits
For 2023, the amount an individual can contribute to a 401k, 403(b), and most 457 plans increases to $22,500, up from $20,500 in 2022. The catch-up contribution amount, for employees 50 and older who participate in these plans, increases to $7,500 from $6,500.
Keep in mind, this means that participants who are over the age of 50, can contribute up to $30,000 to one of these plans.
For IRA's, the amount an individual can contribute increases to $6,500 (up from $6,000 in 2022). The catch-up contribution limit for SIMPLE account increases to $3,500 (up from $3,000).
Phase-out ranges and income cap:
In addition, the IRS released new income phase-out ranges for making contributions to a traditional IRA and Roth IRA.
If either the taxpayer or their spouse is covered by a workplace retirement plan during the tax year, the maximum amount they can contribute to a traditional IRA may be reduced (phased out) to zero, depending on the taxpayer's filing status and income.
-- If neither the taxpayer nor their spouse is covered by a retirement plan at work, the phase-out rule doesn't apply.
The traditional IRA phase-out ranges for 2023 are:
For single taxpayers covered by a workplace retirement plan, the phase-out range begins at $73,000 and end at 83,000 (up from $68,000 and $78,000 in 2022)
For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range increases to between $116,000 and $136,000 (109,000 and 129,000 in 2022)
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range increases to between $218,000 and $228,000 ($204,000 and $214,000).
For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
The phase-out ranges for Roth IRAs are:
For singles and heads of household, the phase out begins at $138,000 and ends at $153,000 (up from between $129,000 and $144,000 in 2022)
For married couples filing jointly, between $218,000 and $228,000 (up from between $204,000 and $214,000 in 2022)