The Internal Revenue Code provides for dollar limitations on benefits and contributions under qualified retirement plans. IRC Section 415 requires the limits to be adjusted annually for cost-of-living increases.
Description of Limit | 2021 | 2022 | |||
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401(k) Elective Deferrals | $ | 19,500 | $ | 20,500 | |
403(b)/457 Elective Deferrals | $ | 19,500 | $ | 20,500 | |
Annual Compensation Limits | $ | 290,000 | $ | 305,000 | |
Annual Defined Contribution Limits | $ | 58,000 | $ | 61,000 | |
Catch-up Contributions | $ | 6,500 | $ | 6,500 | |
Highly Compensated Employees | $ | 130,000 | $ | 135,000 | |
Social Security Wage Base | $ | 142,800 | $ | 147,000 | |
Annual Benefit Limit (Defined Benefit Plans) | $ | 230,000 | $ | 245,000 | |
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Sources: Internal Revenue Service; Journal of Accountancy. |