Beth Pinsker: Forget the $22,500 limit, some workers can supersize their tax-deferred retirement savings up to $265,000 in 2023

by | Oct 31, 2022 | Stock Market

If you really want to rev up your retirement savings and minimize income taxes, the best thing to be is a late-career professional in private practice. When you’re making a lot of money and are close to retirement age, you have savings options that go way beyond the levels of the typical workplace 401(k) plan. But you can also save more and lower your tax burden if you’re a ride-share driver, nanny or just anyone with a side hustle. As long as you can handle a little extra paperwork and some fees, you can set up a solo retirement plan and enjoy higher limits than most employees. 

The IRS recently announced new maximum retirement contribution levels for 2023, and most people focus on the amount allowed for employee deferrals in a 401(k) plan, which will be $22,500, with an additional $7,500 for those 50 and older. For traditional IRAs and Roths, it’s $6,500 with an extra $1,000 for catch-ups. You get to the bigger numbers when you’re in the position of being both the employee and the employer. For SEP IRAs or solo 401(k) plans, which are designed for those who file Schedule C for self-employment income, you can defer up to the total limit allowed for both employe …

Article Attribution | Read More at Article Source

Share This