Many retirement plan contribution limits have remained unchanged for the next year as inflation and the cost-of-living index did not meet the statutory thresholds to make an adjustment.
We have outlined the changes below affecting retirement plans.
For simplified employee pension (SEP) IRAs and individual/solo 401(k) plans, elective deferrals increase to $54,000. This is an amount you can ask your employer to deduct from your pay and contribute on your behalf to an employer-sponsored retirement plan.
An increase to $215,000 for the basic limitation on annual benefits under a defined benefit plan was also imposed. This is a limit to measure how much a person receives in annual benefits (healthcare, insurance, retirement contributions, etc.).
For more information on contribution limits, visit the IRS website.