Human Resources

IRS Announces 2023 Retirement Plan Contribution Limits

IRS Announces 2023 Retirement Plan Contribution Limits

Author Executive Benefits Team
Date October 23, 2022
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The IRS announcement of 2023 retirement plan contribution limits reflects the rising cost of living.

On October 21, 2022, the Internal Revenue Service (IRS) announced the 2023 limitations on benefits and contributions that individuals can make to a qualified retirement plan.

Key contribution plan limit adjustments are shown in the chart below. To read the full announcement, see: Notice 2022-55: 2023 Limitations Adjusted as Provided in Section 415(d), etc.

Important takeaways include increases in almost every category in the amounts workers can save for retirement through their individual retirement account (IRA) or qualified retirement plan contributions driven by Cost-of-Living Adjustments COLA.

IRS 2023 Retirement Plan Contribution Limits: Key Takeaways

Current2023
Social Security taxable wage base$147,000$160,200
Key employee in top-heavy plan salary definition$200,000$215,000
Highly compensated employee salary definition$135,000$150,000
Maximum annual benefit earned under a defined benefit plan [IRC Section 415 limit]$245,000$265,000
Maximum contribution to a participant’s account in one or more defined contribution plans [IRC Section 415 limit]$61,000$66,000
Maximum salary deferral – 401(k)/403(b) plans [IRC Section 402(g) limit] and most 457 plans$20,500$22,500
Maximum salary deferral – SIMPLE 401(k) plans$14,000$15,500
Minimum compensation amount – Simple Employee Pension Plan (SEPs)$ 650$ 750
Maximum compensation amount – 401(a) plans, 403(b) plans, and SEPs$305,000$330,000
Age 50 catch-up contribution – 401(k) plans, 403(b) plans, and 457(b) governmental plans$6,500$7,500
Catch-up contribution – SIMPLE 401(k) plans$3,000$3,500

Compare to previous retirement plan contribution limits: IRS Contribution Limits 2022 Deep Dive: What’s Most Important to Know and IRS Announces Retirement Plan Contribution Limits for 2021

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This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, accounting, legal or tax advice. Any tax advice contained herein is of a general nature. You should seek specific advice from your tax professional before pursuing any idea contemplated herein.

Securities offered through Lion Street Financial, LLC (LSF) and Valmark Securities, Inc. (VSI), each a member of FINRA and SIPC. Investment advisory services offered through Lion Street Advisors, LLC (LSA) and Valmark Advisers, Inc. (VAI), each an SEC registered investment advisor. Please refer to your investment advisory agreement and the Form ADV disclosures provided to you for more information. VAI/VSI and LSF/LSA are non-affiliated entities and separate entities from OneDigital.

Unless otherwise noted, VAI/VSI, LSF/LSA are not affiliated, associated, authorized, endorsed by, or in any way officially connected with any other company, agency or government agency identified or referenced in this document.

Lion Street Advisors // Lion Street Financial

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