As we head into 2023, there are some changes in store for annual contributions to 401K plans and retirement plans. As a payroll company that provides expert services to help employers stay on top of these changes, we wanted to keep you informed.
Firstly, the IRS has increased the contribution limits for 401K plans and other defined contribution plans. The new limit for 2023 is $20,500, up from $19,500 in 2022. This is great news for employees who want to save more for their retirement.
But what about those who are 50 or older and want to make catch-up contributions? We have good news for them too. The catch-up contribution limit for employees who are 50 or older has also increased. In 2023, they can contribute an additional $6,500, up from $6,000 in 2022.
For those who have a defined benefit plan, the limit on the annual benefit has also increased. In 2023, the maximum annual benefit is $245,000, up from $230,000 in 2022.
It's important to keep in mind that these contribution limits are subject to change every year, so it's important to stay up-to-date with the latest information.
At A&A Employer Services, we understand that keeping up with these changes can be overwhelming, especially for small businesses. That's why we offer comprehensive payroll services to help businesses manage their payroll and stay compliant with changing regulations.
In addition to payroll processing, we also offer retirement plan administration services, including plan setup, maintenance, and compliance testing. Our team of experts is here to help you navigate the complex world of retirement plans and ensure that your employees are getting the most out of their retirement savings.
In conclusion, 2023 brings some exciting changes to annual contributions to 401K plans and retirement plans. With the increased contribution limits and catch-up contributions, employees have more opportunities to save for their future. At A&A Employer Services, we're here to help you make the most of these changes and ensure that your business stays compliant with all regulations.
