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401k Contribution Limits 2023

401k Contribution Limits 2023

October 25, 2022

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.



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