IRS Announces Contribution Limits for 2023
2023 Annual Contribution Limits
It may be time to up your contributions to the MO Deferred Comp Plan as the IRS announced the new limits for retirement savings contributions for 2023. The new maximum annual contribution limit for 457(b) plans – like the MO Deferred Comp Plan – will increase to $22,500 in 2023, a $2,000 increase from this year's maximum of $20,500. Catch-up contributions for those over 50 years old will increase to $7,500, adding up to $30,000 annually. The 2023 contribution limits apply to most 457(b)s, plus 401(k)s, 403(b)s, and the federal government's Thrift Savings Plan.
|Maximum Annual Deferral – under age 50||$22,500||$20,500||$19,500|
|Age 50 and Over Catch-up Provision Limit||$7,500 ($30,000 total)||$6,500 ($27,000 total)||$6,500 ($26,000 total)|
|Pre-Retirement Catch-up Provision Limit||$22,500 ($45,000 total)||$20,500 ($41,000 total)||$19,500 ($39,000 total)|
2023 Saver's Credit Income Limits
In addition, the income ranges to qualify and claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) will increase in 2023. The 2023 limits will increase to $73,000 for married couples filing jointly, up from $68,000; $54,750 for heads of household, up from $51,000; and $36,500 for singles and married individuals filing separately, up from $34,000. The Saver’s Credit is designed to help low- and moderate-income workers save for retirement by providing a dollar-for-dollar reduction on their tax bill by the amount of the credit. If you qualify, the credit is based on your contributions to an eligible retirement savings plan, like deferred comp. You may be eligible for 50%, 20% or 10% of the maximum contribution amount, depending on your filing status and adjusted gross income (AGI).
Visit the IRS website for more information on contribution limits and the Saver’s Credit.