By Dr. James M. Dahle, WCI Founder

Contribution limits for 401(k)s, 403(b)s, 457(b)s, IRAs, Roth IRAs, HSAs, FSAs, SIMPLE IRAs, and SEP-IRAs are all indexed to inflation. While the contribution limits do not go up every year and while every account does not use the same formula for when there will be an increase, you will generally see an increased contribution every year or two.

Inflation has exploded in the first half of 2022, all the way up to 9.1% in July, so the 2023 contribution limits for many of these accounts have been increased. In fact, if you know the latest inflation numbers, it is possible to calculate the increase even before the IRS announces it in October or November. The closer you get to October, the more accurate your projection can be.

For now, we can make our own calculations for what the 2023 retirement plan contributions will be. We'll update them if they change when the IRS makes it official in the final few months of 2022 (as of late October, the IRS has confirmed the numbers).


2023 401(k) and 403(b) Employee Contribution Limit

The total employee contribution limit to all 401(k) and 403(b) plans for those under 50 will be going up from $20,500 in 2022 to $22,500 in 2023, a large increase. The catch-up contribution limit will increase from $6,500 to $7,500, so if you're 50+, your 401(k) employee contribution limit should be $30,000 in 2023.


2023 401(k)/403(b)/401(a) Total Contribution Limit

For 2023, the total of all employee and employer contributions per employer will increase from $61,000 in 2022 to $66,000 in 2023 for those under 50. Since the catch-up contribution has increased to $7,500, the total contribution for those 50+ will be $73,500.

Note that the 401(a) limit is separate from the 403(b) limit. So, you could theoretically get $66,000 into each of them.


2023 457(b) Contribution Limit

457(b) contribution limits will increase from $20,500 to $22,500 in 2023. 457(b)s have unique catch-up contribution rules, so consult with your plan administrator if you are interested in putting more in your 457(b).


2023 Traditional and Roth IRA Contribution Limits

After two years of staying put at $6,000, IRA contribution limits and catch-up contributions will increase in 2023 to $6,500 ($7,500 if 50+).


2023 SEP IRA Contribution Limits

SEP IRA contribution limits will increase to $66,000 per year for 2023, up from $61,000 per year in 2022.


2023 SIMPLE IRA and SIMPLE 401(k) Contribution Limits

The SIMPLE IRA and SIMPLE 401(k) contribution limits will increase from $14,000 in 2022 to $15,500 in 2023.


2023 Health Savings Account (HSA) Contribution Limits 

For single people, the HSA contribution limit will increase from $3,650 in 2022 to $3,850 in 2023. Family coverage will increase from $7,300 to $7,750.


2023 Flexible Savings Account (FSA) Contribution Limits

Healthcare FSA contribution limits will increase from $2,850 in 2022 to $3,050 in 2023. Note that there are other types of FSAs (such as dependent care FSAs) with different limits.

2022 retirement accounts limits


Other Interesting Increases

The 401(a) compensation limit (the amount of earned income that can be used to calculate retirement account contributions) will increase from $305,000 in 2022 to $330,000 in 2023. This is always 5X the maximum 401(k) plan total contribution limit.

The deductibility phaseout for IRA contributions for those with a retirement plan at work should increase from $68,000-$78,000 in 2022 for singles to $73,000-$83,000 in 2023, and it'll move from  $109,000-$129,00 in 2022 for those married filing jointly to $116,000-$136,000 in 2023.

The Roth IRA Direct Contribution Limit phaseout will increase from $129,000-$144,000 in 2022 for singles to $138,000-$153,000 in 2023 and from $204,000-$214,000 for 2022 for those Married Filing Jointly to $218,000-$228,000 in 2023. If your MAGI is above that, you'll need to contribute indirectly via the Backdoor Roth IRA process.

Social Security benefits will also increase by 8.7% for 2023. The maximum possible Social Security benefit for 2022 was $4,194 for someone taking benefits at age 70 for the first time. If you were a top earner for your career and qualify for the top benefit level, an 8.7% increase is worth $365 per month. The new top payment for 2023 would be $4,559 per month.

The Defined Benefit Plan 415(b) limit for maximum annuity limit will increase from $245,000 in 2022 to $265,000 in 2023.

Highly-compensated employee definition should increase from $135,000 in 2022 to $150,000 in 2023.

2023 retirement contribution limits


While it feels like all of these are increases, they are really just keeping up with inflation (even though 2023's increases are about twice as much as the increases from the previous year). They're just cost of living increases. On a real (after-inflation) basis, they're basically the same as this year.

What do you think? Are you surprised by any of these? Are you glad they're indexed to inflation? Comment below!