Due to the rising cost of living, federal agencies are making several changes to contribution limits for the 2023 plan year.
The 401(k) annual elective deferral for employees under 49 will increase to $22,500. This also applies to 403(b) plans and most 457 plans. Employees 50+ have the same limit, but their catch-up contributions will go from $6500 to $7500, making their total allowable contribution for next year $30,000. Employees with IRAs will also be able to contribute an additional $500 per year to those accounts.
Health Savings Accounts (HSAs) will have a combined (employer + employee) contribution limit of $3,850 for an individual, and $7,750 for families. High Deductible Health Plan (HDHP) deductibles will be raised to $1500, and max out-of-pocket costs increased by $450 individually and $900 per family.
Changes to FSA contributions will only impact healthcare FSAs, not dependent care accounts. Employees will be able to set aside up to $3050 per year, and roll over an additional $40 per year.
Finally, the cap on Social Security earnings subject to the 12.4% FICA payroll tax will increase from $147,000 to $160,200.
Also, SHRM has a handy PDF detailing all of the changes.
