If you meet the income requirements to stash money away in a Roth IRA (individual retirement account), do yourself a favor and learn more about it. A Roth IRA can serve as your wealth-building partner and allow you to unlock tax-free income during retirement. 

The Roth IRA benefits are now even more attractive than they were before. If you're thinking about contributing to the account or looking for ways to maximize your growth potential, here are three benefits you don't want to ignore in 2023. 

People looking at account balance on mobile device.

Image source: Getty Images.

1. Enjoy a higher Roth IRA contribution limit in 2023 

Roth IRAs are special retirement accounts that allow you to build a tax-free nest egg. It would be ideal to load your Roth IRA with as much money as possible, but there's a cap on how much you can tuck away in the account every year. 

For 2023, you'll be able to contribute more money to a Roth IRA. The annual contribution limit climbed to $6,500, up from $6,000 in 2022. If you're 50 and over, the contribution limits are even more attractive. You can contribute up to $7,500 (or 100% of your earned income, if less). This is the first time the contribution limit has changed since 2019. 

There's no pressure to contribute the maximum amount to a Roth IRA. You can contribute $500 or $5,000. It all depends on your goals and financial situation. However, the more money you contribute to a Roth IRA, the closer you can get to building a seven-figure Roth IRA

2. Choose the stocks that align with your goals

Unlike a 401(k), you can use a Roth IRA to invest in individual stocks. It's important to do your research before you invest, but individual stocks can help you supercharge your retirement portfolio. 

Options you might want to consider for your portfolio include:

Having the freedom to choose the assets you hold in your Roth IRA is a big deal. You get to choose the investment options you are most familiar with and diversify your portfolio based on your risk tolerance.

Let's say you want to set yourself up for passive income during retirement. You can intentionally build a diverse portfolio of dividend assets that fund your lifestyle. If you get started in 2023 and work the math, you'll be well on your way toward building a dividend income machine that pays your bills during retirement. 

3. Earn a special tax credit for savers 

If you weren't eligible for the Saver's Credit in 2022, you may have a shot at claiming the credit in 2023. Also known as the Retirement Savings Contribution Credit, this tax break is a perk for low- and moderate-income earners who save money in a qualified retirement account like a Roth IRA. More people will be able to take advantage of the Saver's Credit in 2023 thanks to the IRS inflation-adjusted income limits.

Your Saver's Credit is calculated based on your adjusted gross income, filing status, and the amount of money you contribute to a Roth IRA. You may qualify for a credit worth 50%, 20%, or 10% of your contribution amount, up to the limit. The maximum credit amount you can claim on your tax return is $1,000 for single filers. The cap goes up to $2,000 if you are married filing jointly.

Let's say you're a single filer and tuck away 5,000 in a Roth IRA in 2023. If your adjusted gross income (AGI) is $20,000, you'll fall into the 50% credit bucket. That means your credit will be worth $1,000, which is the maximum amount you can claim on your tax return as a single filer.

Take a look at the income limits based on your filing status to see if you qualify for the Saver's Credit in 2023. 

Saver's Credit Rate

Married Filing Jointly (AGI) 

Head of Household (AGI)

Other Filers (AGI) 

50% of contribution

$0 to $43,500

$0 to $32,625

$0 to $21,750

20% of contribution

$43,501 to $47,500

$32,626 to $35,625

$21,751 to $23,750

10% of contribution

$47,501 to $73,000

$35,626 to $54,750

$23,751 to $36,500

Data source: IRS.

Claim your Roth IRA benefits in 2023 

The Roth IRA is bursting with benefits that you can enjoy in 2023 and beyond. Do your research to determine if a Roth IRA makes sense for you and if you qualify. It could be just the present you need to get closer to your retirement goals.