2023 Retirement Contribution Limits
Author: Siân Killingsworth / 17 Nov 2022 / 401(k) Plan Information, Small Business 401k
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The IRS has announced the 2023 contribution limits for retirement and health savings accounts. This includes contribution limits for 401(k) and 403(b) plans, income limits for IRA contribution deductibility, and the salary threshold to classify key and highly compensated employees.
Good news! Contribution limits for individual retirement accounts (IRAs) will increase from 2022 to 2023, and even more so for retirement savers who participate in a workplace employment plan like a 401(k).
Let’s take a look at the updated limits below:
2023 401(k) and 403(b) Contribution Limits
Maximum employee elective contribution (age 49 and younger) $22,500 Maximum employee elective contribution (age 50 and older) Additional $7,500 Maximum employee elective deferral plus catch-up contribution (age 50 or older) $30,000 Defined contribution maximum limit, employee + employer (age 49 or younger) $66,000 Defined contribution maximum limit (age 50 or older), all sources + catch-up $73,500 Highly compensated employees’ threshold for nondiscrimination testing $150,000 Key employee officer compensation threshold $215,000 Annual compensation limit for HCEs and key employees $330,000
The IRS has also set limits for the total amount that may be contributed to your retirement savings 401(k) account from all sources combined (IRS section 415 limit). This includes any employer matching or profit-sharing contributions, and any employee after-tax contributions. For 2023, this limit has increased from $61,000 to a new maximum of $66,000.
Every plan is different, so it’s important to refer to your Plan Document for any compensation or other applicable limits.
2023 Roth and Traditional IRA Contribution Limits
Roth and traditional IRA contribution limits (age 49 and younger) $6,500 (must have earned income) Roth and traditional IRA contribution limits (age 50 and older) Additional $1,000 IRA modified adjusted gross income limit for partial deductibility: Single $73,000 – $83,000 IRA modified adjusted gross income limit for partial deductibility: Married, filing jointly $116,000 – $136,000 IRA modified adjusted gross income limit for partial deductibility: Married, filing separately $0 – $10,000 IRA modified adjusted gross income limit for partial deductibility: Non-active participant spouse $218,000 – $228,000 Roth IRA modified adjusted gross income phase-out ranges: Single $138,000 – $153,000 Roth IRA modified adjusted gross income phase-out ranges: Married, filing jointly $218,000 – $228,000 Roth IRA modified adjusted gross income phase-out ranges: Married, filing separately $0 – $10,000 SIMPLE IRA contribution limits (age 49 and younger) $15,000 SIMPLE IRA contribution limits (age 50 and older) $19,000
2023 Health Savings Accounts (HSA) Contribution Limits
Health savings accounts (HSA) contribution limits: Individual (employer + employee) $3,850 Health savings accounts (HSA) contribution limits: Family (employer + employee) $7,750 Health savings accounts (HSA) contribution limits: Age 55 or older Additional $1,000 **Catch-up contributions can be made at any time during the year in which the HSA participant turns 55.
**Catch-up contributions can be made at any time during the year in which the HSA participant turns 55.
If you need more detailed guidance, see IRS Notice 2021-61.
