Maximizing ContributioNs
to Retirement Plans
While contributions to traditional IRAs and Roth IRAs can be made up until April 15, 2024, employee contributions to many employer-provided retirement plans, such as 401(k)s, 401(a)s, 403(b)s and SIMPLE IRAs, must be made by December 31. Review your year-to-date contributions, and if you are falling short of the maximum allowed contribution, consider increasing your deferral out of your final paycheck.
The following chart highlights the 2023 contribution maximums by plan type.
| Plan Type | 2023 Limits |
|---|---|
| 401(k), 403(b), Profit-Sharing Plans, etc. | $22,500 |
| Catch up contributions for those age 50 and older | $7,500 |
| SIMPLE Plan | $15,500 |
Catch up contribution for those age 50 and older  |
$3,500 |
| Traditional IRA and Roth IRA | $6,500 |
| Catch up contribution for those age 50 and older | $1,000 |
| Annual employer limit for 401(k), SEP IRA and solo 401(k) | $66,000 |
For high-income earners looking for ways to increase their tax-advantaged retirement savings, it may be worth exploring nonqualified compensation plans (e.g., deferred compensation plans) and the backdoor Roth. For tax year 2023, single taxpayers with a modified adjusted gross income (MAGI) more than $153,000 and married taxpayers more than $228,000 are completely phased out from directly contributing to a Roth IRA. The backdoor Roth sidesteps the Roth contribution income limits by making a nondeductible IRA contribution with after-tax dollars. The contribution is then converted to a Roth with no additional tax due, assuming there was no growth between contribution and conversion.
Here is one of our resources addressing backdoor and mega-backdoor Roth strategies.