401k Contribution Limits 2023

The silver lining to inflation?  You get a big COLA increase for 401k contributions for 2023. 

This week, the Internal Revenue Service (IRS) announced new 401k contribution limits for 2023.  Below we've summarized the key changes.

• For workplace retirement accounts (i.e. 401(k), 403(b), amongst others), the contribution limit increases from $20,500 for 2022 to $22,500 for 2023. Catch-up contributions also increase from $6,500 to $7,500.¹
• The IRS maximum contribution for defined contribution plans increases to $66,000 from $61,000.¹
• The annual compensation limit for plan purposes increases to $330,000 for 2023 from $305,000.¹
• Highly compensated employees for 2023 will now defined as someone who earns $150,000+, up from $135,000.¹
• Eligibility for Roth IRA contributions has increased, as well. These have bumped up to $138,000 to $153,000 for single filers and heads of households, and $218,000 to $228,000 for those filing jointly as married couples.¹
• Another increase was for SIMPLE IRA Plans (SIMPLE is an acronym for Savings Incentive Match Plan for Employees), which increases from $14,000 to $15,500 for 2023.  SIMPLE catch-up contributions also increase from $3,000 to $3,500.¹

If these increases apply to your retirement strategy, you may want to make some adjustments to your contributions. Where I can be of any help, I welcome the opportunity.

^{1. IRS.gov}

^Disclosures:

^{Gordon Asset Management, LLC is a registered investment adviser. Information presented is for educational purposes only and does not intend to make an offer or solicitation for the sale or purchase of any specific securities, investments, or investment strategies. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial adviser and/or tax professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.  The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.}