2023 adjustments to 401(k) and defined contribution plans
The Internal Revenue Service (IRS) announced 2023 adjustments for 401(k) and similar defined contribution plans.
401(k) plans:
Employee 401(k) contributions:
|
2022 |
2023 |
| $20,500 | $22,500 |
Plan participants aged 50 or older can contribute an additional $7,500 for the 2023 tax year.
Employer plus employee contributions:
|
2022 |
2023 |
| $61,000 | $66,000 |
403(b) and 457(b) plans:
Employee deferrals into 403(b) and 457(b) plans:
|
2022 |
2023 |
| $20,500 | $22,500 |
The age 50 catch-up contribution limit for participants in 403(b) and 457(b) plans has increased to $7,500 for the tax year 2023.
Individual Retirement Accounts (IRA):
IRA contributions:
|
2022 |
2023 |
| $6,000 | $6,500 |
The age 50 catch-up for IRA contributions remains at $1,000 for tax year 2023.
The income ranges for determining eligibility to make contributions to a traditional IRA or a Roth IRA have changed.
For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $73,000 and $83,000, up from between $68,000 and $78,000.
For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $116,000 and $136,000, up from between $109,000 and $129,000.
For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $218,000 and $228,000, up from between $204,000 and $214,000.
For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
If you have any questions or need help communicating these changes to employees, please contact us. We'll continue to monitor and communicate regulatory changes to help you succeed in benefits management.
This blog is up to date as of November 2022 and has not been updated for changes in the law, administration or current events.