The IRS recently announced cost-of-living adjustments for 2023. Below is a list of some of the key annual limits that will apply to qualified retirement plans in 2023:
- Compensation limit used in calculating a participant’s benefit accruals: increased to $330,000.
- Elective deferrals to Code Section 401(k) and 403(b) plans: increased to $22,500.
- Annual additions to a defined contribution plan: increased to $66,000.
- Catch-up contributions for employees aged 50 and over to Code Section 401(k) and 403(b) plans: increased to $7,500.
- Annual benefit limit for a defined benefit plan: increased to $265,000.
- Compensation dollar limit for defining a “key employee” in a top heavy plan: increased to $215,000.
- Compensation dollar limit for defining a “highly compensated employee:” increased to $150,000.
The full list of 2023 plan limits included in Notice 2022-55 is available here.