Updating the Numbers for 2023
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.