401(k) Contribution Deadlines for 2023

When it comes to retiring, it’s essential to start planning your retirement contribution strategies for the upcoming fiscal year. One of the most popular retirement plans is the 401(k) plan, which allows employees to save for their retirement while also receiving tax benefits. In this post, we’ll cover the 401(k) contribution deadlines for 2023.

The Contribution Limits for 2023

Before discussing the deadlines, let’s go over the contribution limits for 2023. The Internal Revenue Service (IRS) announced the contribution limit for 401(k) plans for 2023, and it will increase to $20,500. This is a $500 increase from the previous year’s limit of $20,000. This applies to both traditional and Roth 401(k) plans.

For those over the age of 50, the catch-up contribution limit remains the same at $6,500. This means that if you’re over age 50, you can contribute an extra $6,500 on top of the $20,500 limit for 2023.

Contribution Deadlines for 2023

Employers have until a specific date to deposit employee contributions and to make certain matching contributions for the current year. The deadline for 401(k) contributions depends on the type of contribution you’re making.

Employee Contributions

The deadline for employee contributions is the end of the calendar year, which means December 31, 2023. If you want to max out your contribution limit for 2023, you’ll need to contribute $1,708.33 per month to your 401(k) account. If you’re over age 50 and are eligible for catch-up contributions, you can contribute an additional $541.67 per month.

It’s important to note that many employers have a payroll deadline that falls before December 31st. This means that you’ll need to make sure your contribution reaches your employer before their deadline to ensure it counts towards the current year’s contribution limit.

For example, if your employer’s payroll deadline is December 15th, you’ll need to make your contribution by then to ensure it counts towards the 2023 contribution limit.

Employer Matching Contributions

The deadline for employer matching contributions varies by company, but it’s generally due by the company’s tax-filing deadline for that calendar year. For most companies, this is April 15th, 2024. However, the deadline can be extended to October 15th, 2024, if the company files for an extension with the IRS.

If your employer offers a match on your contributions, make sure to find out their matching policy and deadlines. Some employers match contributions each pay period, while others may have an annual match deadline. Knowing your employer’s matching policy can help you plan your contributions strategically.

Profit-Sharing Contributions

Profit-sharing contributions are contributions made by the employer on behalf of the employee, and the deadline to make these contributions is also the company’s tax-filing deadline for the calendar year. If the company has a tax extension, this deadline can be extended to October 15th, 2024.

If you’re self-employed and have a solo 401(k) plan, the deadline to make profit-sharing contributions is the same as for traditional 401(k) plans. Contributions must be made by the end of the calendar year, which is December 31, 2023.

Plan Ahead for Your Future

Planning for retirement can be a daunting task, but it’s essential to take advantage of the benefits of a 401(k) plan. Understanding the contribution limits and deadlines for 2023 can help you plan your finances accordingly.

Make sure to speak with your employer’s HR department to find out their deadlines for 401(k) contributions and matching policies. Plan your contributions strategically to ensure you’re taking full advantage of the tax benefits and employer matches available to you.

Remember, saving for retirement is a long-term goal, and every little bit you contribute can make a significant difference in the long run. So contact us and start planning today to ensure your retirement years are secure and comfortable.