On October 21, 2022, the IRS announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023. The Internal Revenue Code requires that the Secretary of the Treasury adjust the limits annually.
Some highlights are:
- The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan will increase to $22,500.
- The catch-up contribution limit for those aged 50 and over will increase to $7,500.