In keeping with what has become a regular and predictable October event, the IRS in Notice 2022-55 has issued the inflation-adjusted retirement savings limitations for the coming year. Those who follow these annual announcements will note some very significant year-over-year increases from the 2022 amounts, owing chiefly to inflation’s impact on the economic indicators used to make these annual adjustments.
Employer-Sponsored Retirement Plans
The following are key employer-sponsored retirement plan limitations for 2023. They affect defined contribution plans such as 401(k), 403(b), governmental 457(b), simplified employee pension (SEP), and savings incentive match plans for employees of small employers (SIMPLE) IRA plans, as well as defined benefit plans.
Annual additions under Internal Revenue Code Section (IRC Sec.) 415(c)(1)(A) for defined contribution plans: $66,000 ($61,000 for 2022)
Annual additions under IRC Sec. 415(b)(1)(A) for defined benefit pension plans: $265,000 ($245,000 for 2022)
Annual taxpayer deferral limit—402(g) limit—for 401(k), 403(b), and SIMPLE plans in aggregate: $22,500 ($20,500 for 2022)