Insights

2023 Cost of Living Adjustments

By Louis F. LiBrandi, Principal

Plan sponsors should review the cost of living adjustments (COLAs) to determine what, if any, changes need to be communicated to employees by means of orientation meetings and enrollment forms. In addition, the amounts may need to be updated and/or input into the payroll or other human resources information systems used by the employer to monitor contributions made to an employee benefit plan.

The table below contains the dollar limitation for retirement plans and other benefit plan limits and thresholds for the 2021 through 2023 tax years. In 2023 most of the amounts have been increased.

Cost of Living Adjustments

Limits

Retirement Plans

2023

2022

2021

402(g) Elective Deferrals.

Maximum salary-reduction contribution; 401(k), 403(b) and 457(b) plans.

$22,500

$20,500

$19,500

Catch-up Contributions.

Age 50 or older additional salary reduction contributions; 401(k), 403(b), government 457(b) plans.

$7,500

$6,500

$6,500

401(a)(17) Compensation Limit.  Ceiling for using compensation to determine benefits in a qualified retirement plan.

$330,000

$305,000

$290,000

415(m) Maximum dollar amount for a defined contribution plan (excludes catch-up).

$66,000

$61,000

$58,000

Highly Compensated Employee (HCE).

Compensation earned in a prior year is used to determine if a participant is a HCE.

$150,000

$135,000

$130,000

Key Employee.  Minimum compensation for an officer to be treated as a ‘’key employee.”

$215,000

$200,000

$185,000

Social Security Wage Base

2023

2022

2021

Social Security Taxable Wage Base.

$160,200

$147,000

$142,800

Welfare Plans

2023

2022

2021

Health FSA Contribution Limit.

$3,050

$2,750

$2,750

HSA Contribution Limit – Single.

$3,850

$3,650

$3,600

HSA Contribution Limit – Family.

$7,750

$7,300

$7,200

Catch-up Contributions.
Age 55 or older.

$1,000

$1,000

$1,000

Contact us

The Employee Benefit Services Group at PKF O’Connor Davies is available to assist employers with all aspects of employee benefit plan compliance. For more information, please contact your client services partner or either of the following:

Timothy J. Desmond, CPA
Partner-in-Charge
Employee Benefit Services
[email protected] | 551.249.1728

Louis F. LiBrandi, EA, CEBS, ChFC, TGPC
Principal
Employee Benefit Services Group
[email protected] | 646.449.6327