The 2023 income limits for contributing to a Roth IRA have increased from the 2022 limits. For single filers, you may now contribute the maximum amount ($6,500) if your Modified Adjusted Gross Income (MAGI) is less than $138,000. For married filing jointly, you can contribute the maximum amount to your Roth IRA if your MAGI is less than $218,000.
Many are aware that the contribution limit for a Roth IRA has been increased by $500 for 2023, meaning in 2023, an individual can contribute $6,500 to their Roth IRA – or $7,500 if they are 50 years of age or older, but this increase of the income contribution limit is also worth noting.
And when your MAGI is greater than those amounts, the IRS imposes phase-out contribution limits. Charles Schwab has a helpful chart for reference.
Roth IRAs are a great vehicle for retirement investing. Although contributions are made with after-tax dollars, meaning you will not receive a deduction on your income tax, qualified distributions will come out tax free. Additionally, the IRS does not impose Required Minimum Distributions (RMDs) on these accounts, meaning you can leave the funds invested longer. And should you need to draw on these funds before the golden age of 59 ½, you can withdraw your contributions without tax and without penalty.
As a reminder, especially for those who are lower wage earners (e.g., kids), you can still only contribute to a Roth IRA either the maximum amount or no more than your earned income for that year, whichever of the two is less.
ABOUT THE AUTHOR
FINANCIAL ADVISOR & CLIENT SERVICE SPECIALIST
Polly Price is a Financial Advisor and Client Service Specialist for Walkner Condon Financial Advisors. She supports the team of financial advisors with clients in Madison and around the country.