October 21, 2022 - Ferenczy Benefits Law Center
The IRS just released the cost-of-living adjustments for various retirement plan limitations that will take effect on January 1, 2023.? The current rate of inflation has served to increase most of the rates substantially.? The limits that increased for 2023 are shown below in blue bold italics, and include, for the first time in several years, the catch-up contribution limit.
The 2023 and prior years’ limits are as follows:
Limit Type
For Calendar Year
2023 2022 2021 2020 Maximum DB Plan Benefit (IRC §415(b)) (applies to limitation years ending in indicated year) $265,000 $245,000 $230,000 $230,000 Max DC Annual Addition (IRC §415(c)) (applies to limitation years ending in indicated year) $66,000 $61,000 $58,000 $57,000 Salary Deferral Limit (IRC §402(g)) $22,500 $20,500 $19,500 $19,500 Catch-up Limit for 401(k), 403(b), 457 plans (applies to calendar year) $7,500 $6,500 $6,500 $6,500 HCE Compensation (applies to lookback years in indicated year) $150,000 $135,000 $130,000 $130,000 Max Plan Compensation for Retirement Plan Purposes (IRC §401(a)(17)) (applies to plan years beginning in indicated year) $330,000 $305,000 $290,000 $285,000 Key Employee: Officer $215,000 $200,000 $185,000 $185,000 Key Employee: 1% Owner $150,000 $150,000 $150,000 $150,000 Social Security Taxable Wage Base for OASDI Contributions $160,200 $147,000 $142,800 $137,700 457(b) Contribution Limit $22,500 $20,500 $19,500 $19,500 SIMPLE Salary Deferral Limit $15,500 $14,000 $13,500 $13,500 SIMPLE Catch-up Limit $3,500 $3,000 $3,000 $3,000 IRA Contribution Limit $6,500 $6,000 $6,000 $6,000 SEP Threshold $750 $650 $650 $600 ESOP: 5-year Distribution Factor $265,000 $245,000 $230,000 $230,000 ESOP: Account Balance $1,330,000 $1,230,000 $1,165,000 $1,150,000 Premiums for QLACs $155,000 $145,000 $135,000 $135,000
We wish all of you a healthy and prosperous 2023!? If you have any questions, please let us know.? Remember:? we are your ERISA solution!