Updating the Numbers for 2023

Summit Wealth Advocates |

Several important numbers have been updated for 2023 and we want to pass this information along to you.  Here’s what 2023 looks like:

Retirement Plan Contribution Limits:

  • 401(k), 403(b), 457 Plans and Thrift Savings Plans:
  • For those under age 50:  $22,500
  • For those age 50+:  $30,000
  • Reminder for those looking to contribute the maximum amount to their retirement plans for 2023, you may need to adjust your contribution percentage through your employer retirement plan website.
  • SIMPLE 401(k)s and IRAs: 
  • For those under age 50:  $15,500
  • For those age 50+:  $19,000
  • Traditional and Roth IRA Contributions: 
  • For those under age 50:  $6,500
  • For those age 50+:  $7,500

Federal Estate Tax Exemption:  $12.92 million per person / $25.84 million per couple with portability for 2023.

  • Note that the top federal estate tax rate is currently 40%.  However, unless further legislation is enacted, the exemption is set to decline to about $6.8 million per person in 2026.

Minnesota Estate Tax Exemption:  $3 million per person without portability.  There is no current legislation to increase this.

  • Note that the top Minnesota estate tax rate is currently 16%.

Annual Exclusion for Gifts:  $17,000

  • This means that individuals can gift up to $17,000 to any person and not have to file a gift tax return (nor will they bear any gift tax).  For married couples, this means they can gift up to $34,000 to each child / grandchild in 2023 and will not have to file a gift tax return.

Social Security Cost of Living Adjustment (COLA):  8.7%, which is the largest COLA recipients have received since 1981.  The COLA goes into effect 1/1/2023.