401(k) Plan

2023 401(K) Limits Published By IRS

The Internal Revenue Service (IRS) announced the annual contribution limit for 401(K), 403(b), and most 457 plans will increase from $20,500 to $22,500 for tax year 2023. This increase also applies to the federal government’s Thrift Savings Plan.

Other significant increases for 2023 included the catch-up contribution limit for employees aged 50 and over which was increased from $6,500 to $7,500 and the threshold for being considered highly compensated was increased from $135,000 to $150,000.

The IRS announcement making these cost-of-living adjustments to various dollar limitations for pension plans for tax year 2023 can be found at https://www.irs.gov/pub/irs-drop/n-22-55.pdf.    

This is a good time for all participating employees to review their current deductions and make appropriate adjustments for 2023.