The IRS recently issued guidance (Notice 2022-55) providing the 2023 inflation-adjusted dollar limitations for benefits and contributions under qualified retirement plans. A summary of selected key limitations for various plans is provided below.
- Section 401(k) Plans: The employee elective deferral limit for 401(k) plans and other retirement accounts (including Roth 401(k) plans) will be $22,500 (up from $20,500 in 2022). The limit for catch-up contributions for individuals 50 and older will be increased to $7,500 (up from $6,500 in 2022).
- Defined contribution plans: The limit for total employee and employer contributions to defined contribution plans will be $66,000 (up from $61,000 in 2022).
- Defined benefit plans: The limit on annual benefits from a defined benefit plan will be $265,000 (up from $245,000 in 2022).
- Compensation limits: The annual compensation limit for certain tax-favored retirement plans will be $330,000 (up from $305,000 in 2022).
- Individual Retirement Accounts (IRAs): The deductible amount for contributions to an IRA will be $6,500 (up from $6,000 in 2022). The limit for catch-up contributions to an IRA for individuals 50 and older is not subject to cost-of-living increases, and therefore remains unchanged at $1,000. The adjusted gross income (AGI) phase-out range for deductibility of IRA contributions for individuals who participate in an employer retirement plan will be increased to between $73,000 and $83,000 for singles (up from between $68,000 and $78,000 in 2022), and to between $116,000 and $136,000 for joint filers (up from between $109,000 and $129,000 in 2022). The AGI phase-out range for contributions to a Roth IRA will be increased to between $138,000 and $153,000 for singles (up from between $129,000 and $144,000 in 2022), and to between $218,000 and $228,000 for joint filers (up from between $204,000 and $214,000 in 2022).
For further information on additional 2023 inflation adjustments, see our prior story, “Inflation adjustments boost estate, business benefits.”
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