Changes to Retirement Plans Coming in 2023

  • Estate Planning
changes to retirement plans coming in 2023 | estate and probate legal group

Planning for retirement and ensuring you have enough funds for long-term elder care is a huge part of your estate plan. An estate plan is an overall plan for handling your assets and finances now and in the future. We wanted to let you know that there are changes to retirement plans coming in 2023.

If you’ve spent money at the grocery store or gas station lately, you have probably felt the squeeze of inflation. The IRS is making some changes to help combat inflation’s tightening of our wallets.

Changes to Retirement Plans

We will see more significant adjustments to retirement plans in 2023. In fact, the IRS announced a large increase in caps for retirement accounts. A jump this big hasn’t happened in decades. Some changes you’ll see are:

  • Maximum Contribution to 401(k)
    The IRS now allows you to have a maximum contribution of pretax wages of $22,500 per year.
  • Catch-up Contributions
    If you started saving for retirement later in life, catch-up contributions might be a good idea. If you are 50+, you can make a catch-up contribution of $7,500 each year. This is in addition to the maximum allowable 401(k) pretax savings.
  • Looking into 501(k)
    This is a marketing term that refers to plans that use cash-value whole life insurance as a supplement or alternative to other types of retirement plans.

A solid estate plan ensures that your financial decisions concerning retirement and death work well together. You want to make sure the person you listed as a beneficiary of your life insurance is the same as what your will says.

What’s Included in an Estate Plan?

An estate plan is a financial plan on how to take care of yourself and your loved ones in the future. It’s there to help ensure your retirement can fund your lifestyle, take care of you when you need long-term elder care, and pass your assets to your loved ones after you die. Many documents can be included in an estate plan, but some of the main ones are:

It can also include:

There are more items to consider when setting up your estate plan. An experienced estate planning attorney will listen to your needs and requirements and help you establish an estate plan that protects you and your loved ones. It’s best to review your estate plan every 3-5 years, including changes to your retirement plans.

Oak Brook Estate Planning Attorney

Knowing that you have a strong estate plan will ease your mind and help your loved ones. With expert guidance from the estate planning attorneys at Estate & Probate Legal Group in Illinois, we can help make this happen. Contact us today at 630-864-5835.

AREAS WE SERVE: DuPage, Kane, Lake and Will counties.