Federal law sets annual limits on various tax-preferred employee benefits plans. The IRS released 2023 guidelines for retirement plan limits on October 21, 2022.
Plan sponsors will notice a significant increase in employee deferral limits due to inflation. The following chart compares the 2023 and 2022 limits for employer-sponsored retirement plans.
Retirement Benefits Plan Limits Comparison
| Retirement/Savings | 2023 | 2022 |
|---|---|---|
| Maximum Salary Deferral | §401(k) / §403(b) / §457 | $22,500 | $20,500 |
| Maximum “Catch-Up” Salary Deferral (age 50 or older) | $7,500 | $6,500 |
| Compensation Limit | §401(a) | $330,000 | $305,000 |
| Maximum Defined Benefit Limit | $265,000 | $245,000 |
| Defined Contribution Annual Additions Limit | §415 | $66,000 | $61,000 |
| “Key Employee Officer” Compensation Limit | $215,000 | $200,000 |
| “Highly Compensated Employee” Limit | $150,000 | $135,000 |
| Social Security Taxable Wage Base | $160,200 | $147,000 |
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EPIC offers this material for general information only. EPIC does not intend this material to be, nor may any person receiving this information construe or rely on this material as, tax or legal advice. The matters addressed in this document and any related discussions or correspondence should be reviewed and discussed with legal counsel prior to acting or relying on these materials.
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