Know the 2023 IRS contribution limits 

The Internal Revenue Service (IRS) sets limits on the amount you can contribute to your workplace plan each year. For 2023, the maximum is $22,500. The catch-up contribution limit is $7,500. That means if you're 50 or older, you can save a total of $30,000.

How IRS rules affect your contributions

It's reassuring to receive employee benefits, but you need to be aware that there are limits, from maximum annual benefit earned under a defined benefit plan to Social Security taxable wage base. You can see the full list by downloading 2023 Employee Benefit Limits.

Consider saving 10% - 15%

One rule of thumb is to contribute at least 10% to 15% of your income to your plan each year. Some experts suggest saving even more. You can start by putting 6% of your pay into your plan and increasing it by 2% each year until you reach 10% or more. If possible, always contribute enough to get the full company match.

When you make pretax contributions to your plan, you lower your taxable income and reduce your tax bill. But your take-home pay isn’t reduced by as much as you're saving. For example, say you’re in the 25% tax bracket and make a $200 contribution to your plan each paycheck. You’d only reduce your take-home pay by $150.

Save more at 50 and over

You'll want to enjoy this phase of life in style — and also make sure you have enough saved to live well in retirement. Catch-up contributions let you contribute more money to your workplace retirement plan after age 50. You're eligible on January 1 of the year you turn 50, no matter how late in the year your birthday falls. The catch-up contribution for 2023 is an additional $7,500, for an annual total of $30,000. The catch-up contribution for IRAs is an additional $1,000, for a total of $7,500. You can also make a catch-up contribution of $1,000 to your spouse’s IRA, if your spouse is age 50 or over.

Learn more.

This material is provided by The Lincoln National Life Insurance Company, Fort Wayne, IN, and, in New York, Lincoln Life & Annuity Company of New York, Syracuse, NY and their applicable affiliates (collectively referred to as “Lincoln”). This material is intended for general use with the public. Lincoln does not provide investment advice, and this material is not intended to provide investment advice. Lincoln has financial interests that are served by the sale of Lincoln programs, products and services.