Because inflation has gone up, the amount that can be contributed to IRAs, HSAs, Simple IRAs, 401(k) and Profit-Sharing Plans has increased significantly for 2023. By making higher contributions, dentists with the discretionary income to save will be able to save more money in taxes while saving for retirement.
Despite the fears of rising inflation, global uncertainty, and lingering economic effects of the COVID-19 pandemic, a recent report on "How America Saves 2022" by Vanguard indicates retirement savings rates had record high participation in 2021. While it is not yet clear if this trend will hold as higher prices hit people's pocketbooks, taking advantage of the opportunity to save more as a hedge against inflation can be a sound financial planning strategy.
"Dentists who want to achieve financial freedom will try to maximize tax-savings vehicles. With the increase in limits for 2023, now is the time to consider maximizing these savings opportunities,"
says Nate Ricks, CFP®, MS, financial advisor at Financial Freedom for Dentists.
Limits on Individual Retirement Accounts (IRAs), Retirement Plans, Health Savings Account (HSAs) contribution limits and the Annual Gift Tax Exclusion are shown for 2023, and how they compare to 2022:In response to rising inflation this year,