Large Increase for IRA and 401(k) Contribution Limits

Individual Retirement Accounts (IRAs) and company-sponsored 401(k) accounts provide convenient options for individuals to save and invest money in a tax-advantaged manner. These benefits can have a significant positive impact on a retirement investment portfolio. Fortunately for investors, next year will see the largest-ever increase in the annual contribution limits for each of these tax shelters.

Annual contribution limits will increase by $500 to $6,500 for a traditional or Roth IRA and by $2,000 to $22,500 for a 401(k). These increases are driven by recent high inflation, and can help individuals and families keep up with the rising cost of living.

To the extent possible and appropriate given individual circumstances, investors should typically seek to maximize the portion of their portfolio that can be allocated to accounts with tax-advantaged benefits.

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- Anthony Winkels is Managing Partner and Wealth Advisor at Fortis Wealth Management