2023 Retirement Limits & Social Security Adjustments

2023 Retirement Limits & Social Security Adjustments

The Internal Revenue Service (IRS) recently announced information on defined benefit and defined contribution plan limits for 2023. Additionally, the Social Security Administration recently announced a Social Security wage base adjustment for 2023.

On October 21, the IRS released the 2023 cost of living adjustments (IRS Notice 2022-55) applicable to defined benefit and defined contribution plans (highlights below). 


   2023  2022

  Elective deferral limit for purposes of cash or deferred
  arrangements [401(k) plans] and tax-sheltered
  annuities [403(b) plans]

 $22,500  $20,500     
  Maximum deferral limit for 457 plans   $22,500  $20,500 

  >Age 50 catch-up contribution limit to 401(k),
  403(b) or 457(b) plans 

 $7,500  $6,500
  Maximum deferral limit for SIMPLE plans   $15,500    $14,000
  >Age 50 catch-up contribution limit to SIMPLE plans  $3,500   $3,000

 

2023 Social Security Cost-of-Living Adjustment 

The Social Security wage base in 2023 will increase to $160,200 from 2022 wage level of $147,000. The combined Social Security and Medicare tax rate remains at 7.65% and the Social Security portion is 6.2% on wages up to the applicable maximum taxable amount; the Medicare portion is 1.45% on all wages.

The Affordable Care Act imposes an additional 0.9% Medicare tax on high wage earners, applicable on earnings in excess of $200,000 in a calendar year.

 

2023 Retirement Limits & Social Security Adjustmentshttps://www.cbiz.com/Portals/0/Images/CBIZ_HCM_Retirement_limits.png?ver=gsijym9odDqu1jldJ-b4Gg%3d%3dhttps://www.cbiz.com/Portals/0/Images/CBIZ_HCM_retirement.png?ver=yAYHGm38_DcYsuZlQXEOuQ%3d%3dThe IRS and Social Security Administration recently released 2023 retirement limits and Social Security adjustments. 2022-10-25T16:00:00-05:00

The IRS and Social Security Administration recently released 2023 retirement limits and Social Security adjustments. 

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