IRA Contribution Limits 2023 For Spouse
Understanding the Basics of IRA Contributions
Individual Retirement Accounts (IRAs) are a great way for spouses to save for retirement. The money you save in an IRA can be used to supplement Social Security and other income sources when you retire. Each year, the IRS sets limits on how much you can contribute to an IRA. Knowing the limits for 2023 will help you plan for your retirement.
IRA Contribution Limits for 2023
For 2023, the IRS sets the maximum IRA contribution limit at $6,000. This limit applies to both Traditional IRAs and Roth IRAs. However, if you are over the age of 50, you can make an additional “catch-up” contribution of $1,000. This brings the total contribution limit to $7,000. If you are married, both you and your spouse can each contribute up to the maximum limit.
Spousal IRA Contributions
If you are married and one spouse does not work or does not earn enough to qualify for an IRA contribution, the other spouse can still make a contribution on their behalf. This is called a “spousal IRA.” For 2023, the contribution limit for a spousal IRA is the same as for any other IRA, $6,000, plus the catch-up contribution of $1,000 if you are over age 50. This means that a married couple can contribute a total of $14,000 to their IRAs for 2023.
Income Limits for IRA Contributions
The IRS sets income limits on who can make IRA contributions. For 2023, if you are single and have an adjusted gross income (AGI) of more than $66,000, you cannot make a traditional IRA contribution. If you are married and file taxes jointly, the AGI limit is $105,000. However, if you are married and file taxes separately, you cannot make a traditional IRA contribution if your AGI is over $10,000. That said, if you do not qualify for a traditional IRA contribution, you can still contribute to a Roth IRA.
Tax Benefits of an IRA
IRA contributions can help lower your taxable income. This is because traditional IRA contributions are tax-deductible, meaning that you can deduct the amount of your contribution from your taxable income. Roth IRA contributions, on the other hand, are not tax-deductible but the money you put into the account will grow tax-free. This means that when you withdraw the money, you will not have to pay taxes on it.
Benefits of Contributing to an IRA
Contributing to an IRA can be a great way to save for retirement. The money you contribute can grow tax-free, allowing you to maximize your retirement savings. Plus, you can use the tax benefits to lower your taxable income. And if you are married, you and your spouse can each contribute up to the maximum limit of $6,000 (plus the $1,000 catch-up contribution, if applicable).
Start Saving for Retirement Now
With the IRA contribution limits for 2023 in place, now is the time to start thinking about your retirement savings. Even if you are just starting out, contributing a small amount each month can make a big difference in the long run. Don’t wait until it’s too late to start saving for retirement. Talk to a financial advisor to get started on the right track.
Conclusion
The IRS sets limits on how much you can contribute to an IRA each year. For 2023, the contribution limit is $6,000 (plus an additional $1,000 if you are over age 50). Spouses can also contribute to a spousal IRA, allowing them to contribute a total of $14,000 to their IRAs for 2023. Contributing to an IRA can help you save for retirement and take advantage of the tax benefits that come with it.