2023 Retirement Plan Contribution Limits

The 2023 maximum contribution limit for the TSP and 401(k) plans is $22,500 ($7,500 catch-up contributions). You can contribute up to $6,500 to Traditional and Roth IRAs ($1,000 catch-up contributions).
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Retirement contribution limits savings
Table of Contents
  1. Types of Retirement Plans Available
    1. Employer-Sponsored Retirement Plans
    2. Individual Retirement Plans, Including the Popular Roth and Traditional IRAs
    3. Self-Employed Retirement Plans or Small Business Retirement Plans
  2. 2023 Retirement Plan Contribution Limits
    1. Employer-Sponsored Retirement Plans: 401(k), 403(b), 457, 401(a) and Thrift Savings Plan
    2. Individual Retirement Arrangements (IRAs)
    3. Self-Employed and Small Business Plans
  3. Don’t Exceed Retirement Plan Contribution Limits
    1. Balancing Retirement Account Contributions When Working More Than One Job
    2. Pay Attention to Employer-Sponsored Contributions When Changing Jobs
  4. Contribute as Much as You Can Now

If you’re saving for retirement, you need to pay attention to annual retirement plan contribution limits for two reasons:

  1. You want to contribute as much as you can to reach your goals.
  2. You don’t want to contribute too much and incur a penalty.

The IRS reviews retirement plan contribution limits each year. This year, they made a few changes and increased the maximum contribution levels of several retirement plans for 2023.

Contribution limits increased by $2,000 for 2023 for employee-sponsored deferral programs such as the Thrift Savings Plan (TSP) and the 401(k) plan – and similar plans such as the 403(b), 457 and 401(a) plans. 

Individual retirement account contribution levels increased by $500 over 2022, apart from SIMPLE IRA plan limits, which increased by $1,500. 

Here are the details.

Types of Retirement Plans Available

There are many different retirement accounts available to workers, but they all fall into three main categories:

  • Employer-sponsored retirement plans
  • Individual retirement accounts (IRAs)
  • Self-employed or small business retirement plans

Let’s take a simplified look at the types of retirement plans available to most people and their respective contribution limits.

Note: This article does not cover Social Security benefits or traditional pension plans, such as those provided by the military retirement system, the government or some private-sector companies.

Employer-Sponsored Retirement Plans

If you are in the military or work in the civil service, you are likely eligible for the Thrift Savings Plan (TSP). For the most part, the TSP functions like a 401(k) plan, which is a common retirement plan in the civilian sector.

Similar retirement plans include the 403(b), which is common in nonprofit sectors, and 457 and 401(a) plans.

These numbers may seem confusing at first, but they simply refer to chapters of the tax code.

Employer-sponsored retirement plans allow participating employees to contribute money directly from their paychecks, often before the money has been taxed.

The money will then grow tax-free until you make qualified withdrawals in your retirement age. At that point, the IRS taxes your withdrawals.

Some employer-sponsored retirement plans have a Roth component, in which you make contributions after taxes have been collected from your pay.

The contributions then grow without the drag of taxes, and qualified withdrawals are also tax-exempt.

Individual retirement arrangements (IRAs) are among the best ways to save for retirement, whether you have access to an employer-sponsored retirement plan or not.

You can invest in IRAs without worrying about exceeding your employer-sponsored retirement plan contribution limits because these plans have separate contribution limits.

The two main types of IRAs are the traditional IRA and Roth IRA.

Traditional IRA contributions are generally tax-deductible if your income falls within income deductibility ranges. Contributions are made tax-free and grow tax-free, and are taxed when you make withdrawals. You can learn more about them in our traditional IRA guide.

The Roth IRA is slightly different. You make contributions with funds you have already paid taxes on.

Your contributions grow tax-free, and the IRS does not tax withdrawals. Roth IRAs have different income qualifications than traditional IRAs, so make sure you are aware of those details before making contributions.

You can learn more about Roth IRAs in our guide.

Related:

Self-Employed Retirement Plans or Small Business Retirement Plans

A variety of retirement plans are only open to small businesses and those who are self-employed.

One of the most popular is the solo 401(k) or individual 401(k), which has the same contribution limits as the 401(k) plan you find in the commercial sector, with one major addition: small business owners can defer a portion of their business income as an employer contribution.

Other small business retirement plans include simplified employee pension plans (SEP-IRAs), savings incentive match plans for employees (SIMPLE IRAs) and Keogh plans.

The IRS has a good rundown here.

2023 Retirement Plan Contribution Limits

Here are the new limits for the 2023 tax year for the various types of retirement plans. Future retirement plan contribution limits will be reviewed annually.

Employer-Sponsored Retirement Plans: 401(k), 403(b), 457, 401(a) and Thrift Savings Plan

  • Younger than age 50: $22,500; total maximum contribution (including employer matching, bonuses, etc.): $66,000
  • Older than age 50: $30,000 ($22,500, + $7,500 catch-up contribution); total maximum contribution (including employer matching, bonuses, etc.): $73,500

You must make all 401(k) contributions within the calendar year.More: 401(k) Contribution Limits and Thrift Savings Plan Contribution Limits.

Individual Retirement Arrangements (IRAs)

  • Younger than age 50: $6,500
  • Older than age 50: $7,500
  • Traditional and Roth IRAs share a contribution limit: $6,500 across both accounts if you are younger than age 50 ($7,500 if you are older). You can contribute all of that amount to one account or split it between them. It doesn’t matter, as long as you don’t exceed the limit.

You can make contributions in the calendar year or up to the tax filing deadline of the following year (usually April 15).

Read more about Roth and traditional IRA contribution limits, including income rules, withdrawal rules and other relevant information.

Self-Employed and Small Business Plans

  • SIMPLE IRA plan:
    • Younger than age 50: $15,500 in salary contributions
    • Older age 50: $18,000; plus either a 2% nonelected contribution or a 3% matching contribution
  • Simplified employee pension (SEP): The lesser of 25% of an employee’s compensation or $66,000
  • Solo 401(k):
    • Younger than age 50: Salary deferrals up to $22,500. Participants can contribute up to an additional 25% of their net earnings from self-employment income, but total contributions cannot exceed $66,000.
    • Older than age 50: $30,000. Participants can contribute up to an additional 25% of their net earnings from self-employment income, but total contributions cannot exceed $73,500.

Small business plans may have different contribution deadlines. For example, some plans follow the calendar year, while others are more like IRAs and have a contribution deadline that matches the tax-filing deadline each year. Consult with your retirement plan documentation or a tax professional for more information.

Note: If you have a self-employed retirement plan, consider seeking tax assistance to ensure you choose the best retirement plan for your situation.

Don’t Exceed Retirement Plan Contribution Limits

Each retirement plan has specific qualifications, contributions and other rules that you must follow.

Avoid exceeding contribution limits, which may subject you to penalties or fees with the IRS.

It’s also important to note that some of these plans have common contribution limits.

For example, the solo 401(k) plan shares a contribution limit with the employer-sponsored plans listed above, such as the 401(k), TSP or 403(b).

If you are eligible for both plans, balance your contributions between them to ensure your total contributions don’t exceed the maximum for the year.

Balancing Retirement Account Contributions When Working More Than One Job

Let’s look at an example I face each year.

The 2023 employer-sponsored contribution limit for 401(k), TSP and similar retirement plans is $22,500 if you are younger than age 50 (which I am).

I have a small business with a Solo 401(k) plan. I am also a member of the Air National Guard and am eligible for the TSP.

Unfortunately, these two plans share the same contribution limit, so I have to either focus all my contributions in one account or do a balancing act each year to avoid exceeding contribution limits.

In my case, I max out my Solo 401(k) each year and don’t contribute anything to the TSP.

I don’t earn enough in the Guard in most years to max out my TSP; otherwise, I would use that for my contributions. But I can max out my Solo 401(k) through my business each year, so I do that instead.

Focusing all my contributions in one account simplifies bookkeeping and helps me avoid contributing too much in any given tax year (and avoiding costly penalties that may occur for doing so).

Pay Attention to Employer-Sponsored Contributions When Changing Jobs

You also need to be aware of contribution limits if you change jobs in any given year. Most employer-sponsored retirement plans only allow you to contribute a percentage of your income, not a fixed dollar amount.

So you need to run the numbers to ensure you don’t contribute too much if you change jobs.

This is a common situation military members find themselves in when they separate from the military.

If possible, plan for this in advance of your separation. One way to do that is to front-load your contributions in the early part of the year to ensure you max out your contributions before separating from the military. (You can also do this from any job if you know you will be leaving during the calendar year.)

Contribute as Much as You Can Now

It’s best to contribute as much as possible to your retirement accounts because that gives your money more time to grow via compound interest.

Remember, the more money you invest now, the less you have to worry about later.

So the best thing you can do today is start investing.

If you aren’t sure how to invest, or if the current markets make you nervous, consider placing your money in a high-interest money market account or a certificate of deposit (CD) until you feel more comfortable investing in equities.

Additionally, most retirement accounts have a cash fund or cash equivalent, which allows you to contribute, then figure out where to invest later.

This removes the most significant barrier to investing.

Finally, if you don’t know where to start, you can invest in a target-date fund, similar to those found in the TSP.

These funds automatically diversify and balance your portfolio, so you don’t have to make any big decisions or take any additional actions.

Don’t let uncertainty stop you from contributing to retirement accounts now. Just get started. Future you will thank you in a few years.


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  1. Tom Umberg says

    I was a deployed service memebr for 5 months in 2009 and 6 months in 2010. I am over 50. Can I contribute $22,000 to my 401(k), plus $22,000 to TSP, plus $6000 to an IRA? If not, what is the maximum I can contribute in 2009 and 2010. Thanks.

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