Make catch-up contributions
Employees that are 50 and older are definitely eligible to make catch-up contributions to 401(k) plans. The 401(k) catch-up contribution limit will be $7,500 in 2023. Older workers are able to defer paying income tax as much as $30,000 in a 401(k) account.
A 55-year-old employee in the 24% tax bracket who decides to max out his 401(k) plan might reduce his current tax bill by $7,200. Making catch-up contributions will only help you boost your retirement account balance in the following years that lead up to your retirement. You can also defer paying income tax on your catch-up contributions, at least until you withdraw the money from the account.
Reset your automatic contributions
The majority of 401(k) contributions are instantly withheld from your paycheck and deposited in a retirement account. The 401(k) contribution limit increases by $2,000 in 2023, so make sure you try to adjust the withholding from your paychecks.
Those who want to max out their 401(k) in 2023 will have to save around $1,875 per month or $937.50 per twice-monthly paycheck. Workers that are 50 years and older might defer paying income tax as much as $2,500 per month.
