The IRS recently announced that substantially all of the key retirement plan and health and welfare plan limits will increase next year - some significantly due to higher inflation. Notice 2022-55 (Oct. 21, 2022); Rev. Proc. 2022-38 (Oct. 18, 2022); Rev. Proc. 2022-24 (April 29, 2022). The Social Security Administration and PBGC also recently announced adjustments for the Social Security wage base, PBGC premiums, etc., for next year.
While high inflation rates have wreaked havoc in many sectors, they have generated the largest dollar increase in the limits since indexing based on inflation started in 2007. Higher income participants in 401(k) and similar elective deferral plans are particularly likely to take advantage of the changes.
The chart below reflects the key limits, along with other frequently used benefit and compensation items, for 2023.
| RETIREMENT PLAN LIMIT CHANGES | ||
| 2022 | 2023 | |
| 401(k), 403(b), 457(b) and SARSEP Elective Deferrals | $ 20,500 | $ 22,500 |
| Catch-Up Contributions to 401(k), 403(b) and Governmental 457 Plans | $ 6,500 | $ 7,500 |
| Elective Contributions to SIMPLE Plans | $ 14,000 | $ 15,500 |
| Catch-Up Contributions to SIMPLE Plans | $ 3,000 | $ 3,500 |
| IRA Contributions | $ 6,000 | $ 6,500 |
| Catch-Up IRA Contributions | $1,000 | $1,000 |
| Annual Limitation on Compensation | $305,000 | $330,000 |
| 415 Limitation on DB Benefits | $245,000 | $265,000 |
| 415 Limitation on DC Plan Contributions | $61,000 | $66,000 |
| Highly... | ||
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