Every year, the Internal Revenue Service (IRS) announces cost-of-living adjustments (COLA) that have a direct impact on qualified retirement plans. Notice 2022-55, posted on October 21, 2022 via the official IRS website (www.irs.gov), provides a comprehensive listing of these adjustments and how they will affect pensions and other retirement plans.
The maximum Defined Contribution Plan Annual Addition under IRC §415(c)(1)(A) has increased by $5,000 from a 2022 Limit of $61,000 to a 2023 Limit of $66,000.
Also, the Annual Plan Compensation Limit under IRC §401(a)(17) has increased by $25,000 from a 2022 Limit of $305,000 to a 2023 Limit of $330,000.
The maximum Annual 401(k) and/or 403(b) Elective Deferral under IRC §402(g)(1), as well as the Maximum Annual 457 Deferral under IRC §457(b), has increased by $2,000 from 2022. The limit is $22,500 for 2023. For individuals age 50 or older by the end of the year, the catch-up contribution is up by $1,000 from $6,500 in 2022 to $7,500 in 2023.
The maximum Defined Benefit Employer Provided Annual Lifetime Pension limit under IRC §415(b)(1)(A) increased by $20,000 from $245,000 in 2022 to $265,000 in 2023.
For a complete listing of these changes and information on how these changes may impact you or your retirement plans, contact a Rudd and Wisdom consultant today.