On October 21, 2022, the IRS announced inflation adjusted amounts for 2023 retirement plans. Among the bigger changes – contribution limits to 401(k), 403(b) and 457 Plans are experiencing a big jump for 2023. Below is an outline of the 2023 contribution limits for retirement plans effective January 1, 2023.
401(k), 403(b), 457 Plans |
2022 |
2023 |
| Elective Deferral Limit | $20,500 | $22,500 |
| Catch-up Contribution Limit (age 50 and over) | $6,500 | $7,500 |
| Defined Contribution Plan Annual Contribution Limit | $61,000 | $66,000 |
IRAs |
2022 |
2023 |
| IRA Contribution Limit | $6,000 | $6,500 |
| IRA Catch-up Contribution Limit (age 50 and over) | $1,000 | $1,000 |
Additional Changes to Retirement Plans
The limitation used in the definition of highly compensated employees for 2023 will increase from $135,000 to $150,000. Additionally, certain plans will see the following updates:
- The annual compensation limit under sections 401(a)(17), 404(I), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased from $305,000 to $330,000.
- The dollar limitation under section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from $200,000 to $215,000.
- The limitation used in the definition of “highly compensated employee” under section 414(q)(1)(B) is increased from $135,000 to $150,000.
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