401k Contribution Limits 2023 Company Match
401k plans are a great way to save for retirement. They offer tax advantages that traditional investments do not and allow individuals to save a good portion of their income for the future. The amount that can be contributed to a 401k plan is limited each year by the IRS and is adjusted for inflation. In 2023, the 401k contribution limits for employees and employers are expected to remain the same as the current limits.
401k Contribution Limits for Employees
The current 401k contribution limit for employees is $19,500. This limit applies to all employees, regardless of their age or income. Employees who are 50 or older are also eligible for an additional catch-up contribution of $6,500. These limits are expected to remain the same in 2023, but may be adjusted for inflation. It is important to note that any amount contributed over the 401k limit will be considered an excess contribution and subject to excise taxes.
401k Contribution Limits for Employers
Employers can also contribute to their employees' 401k plans. The current limit for employer contributions is 25% of an employee's salary up to a maximum of $58,000. This limit is expected to remain the same in 2023. Employers can also offer a matching contribution, which is an amount that matches the employee's contribution up to a certain percentage or dollar amount. The maximum amount of employer matching contributions is currently $19,500. This amount is also expected to remain the same in 2023.
401k Contribution Limits for Self-Employed Individuals
Self-employed individuals are also eligible to contribute to a 401k plan. The contribution limit for self-employed individuals is $58,000 in 2021 and is expected to remain the same in 2023. Self-employed individuals are also eligible for an additional catch-up contribution of $6,500. This amount is also expected to remain the same in 2023.
401k Contribution Limits for High-Income Individuals
High-income individuals, or those with an adjusted gross income of $125,000 or more, are subject to additional contribution limits. The limit for high-income individuals is equal to the lesser of $58,000 or 100% of their compensation. This limit is expected to remain the same in 2023. High-income individuals are also eligible for an additional catch-up contribution of $6,500, which is also expected to remain the same in 2023.
401k Contribution Limits for SIMPLE IRAs
Individuals who are employed by a small business may be eligible for a SIMPLE IRA. The contribution limit for a SIMPLE IRA is $13,500 in 2021 and is expected to remain the same in 2023. Individuals who are 50 or older are eligible for an additional catch-up contribution of $3,000. This amount is also expected to remain the same in 2023.
Conclusion
The 401k contribution limits for employees, employers, self-employed individuals and high-income individuals are expected to remain the same in 2023. Employers can also offer a matching contribution, which is an amount that matches the employee's contribution up to a certain percentage or dollar amount. It is important to note that any amount contributed over the 401k limit will be considered an excess contribution and subject to excise taxes.
Summary
The 401k contribution limits for employees, employers, self-employed individuals and high-income individuals are expected to remain the same in 2023. Employers can also offer a matching contribution up to a certain percentage or dollar amount. It is important to note that any amount contributed over the 401k limit will be considered an excess contribution and subject to excise taxes.