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2023 IRS Contribution Maximums

October 21, 2022

The IRS has released new guidelines for the 2023 Contribution Maximums for company-sponsored retirement plans and they’ve increased! If you’re not sure what they are, Leading Retirement Solutions has you covered.

Retirement Plan Maximum Contributions:

IRS guidelines detail the maximum income that an employee (including company owners) may contribute to a company-sponsored retirement plan as well as the maximum contributions an employee (including company owners) may receive from the business.

Contribution Highlights for 2023:

  • $22,500  -  The contribution maximum for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan.
  • $330,000  -  The amount of your compensation that can be taken into account when determining employer and employee contributions.
  • $6,500 - The contribution maximum for employees who participate in IRAs
  • The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2023.
                 

 

2023

2022

2021

401(k), 403(b), Profit-Sharing Plans, 457 etc.

Annual Compensation for Contributions

330,000

305,000

290,000

Elective Deferrals

22,500

20,500

19,500

Catch-up Contributions

7,500

6,500

6,500

Defined Contribution Maximum

66,000

61,000

58,000

ESOP Contribution Maximum

(Account balance/Lengthening determination)

1,330,000
/265,000

1,230,000
/245,000

1,165,000
/230,000

Other

HCE Threshold

(Highly Compensated Employee)

150,000

135,000

130,000

Defined Benefit Maximum

265,000

245,000

230,000

Key Employee

215,000

200,000

185,000

Control Employee (board member or officer)   

130,000

120,000

115,000

Control Employee (compensation-based)

265,000

245,000

230,000

Taxable Wage Base

160,200

147,000

142,800

IRAs

IRA Contribution Maximum

6,500

6,000

6,000

IRA Catch-Up Contributions

1,000

1,000

1,000

Traditional IRA AGI Deduction Phase-out Starting at

Joint Return

116,000

109,000

105,000

Single or Head of Household

73,000

68,000

66,000

SEP IRA

SEP Minimum Compensation

750

650

600

SEP Maximum Contribution

66,000

61,000

58,000

SEP Maximum Compensation

330,000

305,000

290,000

SIMPLE IRA

SIMPLE Maximum Contributions 

15,500

14,000

13,500

SIMPLE Catch-up Contributions

3,500

3,000

3,000

Additional information can be found on the IRS website.

2023 Social Security Cost of Living Adjustment (COLA) Rates

On October 13th the SSA announced an increase of 8.7 percent for Social Security payouts. This is the highest increase in over four decades. On average, this increase will translate to a $146 bump in Social Security benefits starting in January 2023.

If you're looking to start a plan, or just get more information about contribution maximums, don't hesitate to get in contact.

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