Retirement Plan Limits 2023

Retirement Plan Limits 2023

Current and Historical Retirement Plan Limits

Limitation 2023 2022 2021 2020 2019
Plan Compensation $330,000 $305,000 $290,000 $285,000 $280,000
Highly Compensated Employee* $150,000 $135,000 $130,000 $130,000 $125,000
Individual Retirement Account ("IRA") $6,500 $6,000 $6,000 $6,000 $6,000
IRA Catch-up $1,000 $1,000 $1,000 $1,000 $1,000
SIMPLE IRA $15,500 $14,000 $13,500 $13,500 $13,000
401(k) Deferrals $22,500 $20,500 $19,500 $19,500 $19,000
401(k) Catch-up $7,500 $6,500 $6,500 $6,500 $6,000
Simplified Employee Pension ("SEP") $66,000 $61,000 $58,000 $57,000 $56,000
Defined Contribution with Catch-up $73,500 $67,500 $64,500 $63,500 $62,000
Defined Benefit Annuity $265,000 $245,000 $230,000 $230,000 $225,000
Defined Benefit Lump Sum at Age 62 $3.4 million $3.2 million $2.9 million $2.9 million $2.9 million

When a 401(k) or SEP is not enough, a Defined Benefit Plans has a much higher potential contribution limit. The Defined Benefit Plan limit varies on a number of factors, including the business owner's age and earned income. An actuarial calculation can determine how much you can contribute to a Defined Benefit Plan.





Need a Higher Retirement Plan Deduction?

Limitation 2023 2022 2021
Plan Compensation $330,000 $305,000 $290,000
Highly Compensated Employee* $150,000 $135,000 $130,000
Individual Retirement Account ("IRA") $6,500 $6,000 $6,000
IRA Catch-up $1,000 $1,000 $1,000
SIMPLE IRA $15,500 $14,000 $13,500
401(k) Deferral $22,500 $20,500 $19,500
401(k) Catch-up $7,500 $6,500 $6,500
Simplified Employee Pension ("SEP") $66,000 $61,000 $58,000
Defined Contribution w/ Catch-up $73,500 $67,500 $64,500
Defined Benefit Annuity $265,000 $245,000 $230,000
Defined Benefit Lump Sum at Age 62 $3.4 MM $3.2 MM $2.9 MM

* Highly Compensated Employees are determined using the prior year compensation. For example, an employee is generally Highly Compensated in 2024 if their 2023 compensation exceeds $150,000. Employees also may be Highly Compensated based on business ownership or attribution of business ownership.