The IRS announced 2023 deferral limits for employer-sponsored supplemental retirement plans – such as 457(b) and 401(k). As you know, these types of plans provide an excellent opportunity to tuck away dollars for retirement while deferring income taxes.
Log on to FrontLinePlan.com and use My Interactive Retirement PlannerSM along with the table below to see the impact of increasing your contribution. If you have a retirement plan account with Nationwide, you may also schedule time with your local Retirement Specialist or contact Nationwide’s Retirement Resource Group at 888-401-5272 for assistance.
Remember, the beginning of the year is also a good time to check your retirement readiness and make sure your beneficiary designations are up to date.
|Type||2022||2023||2022 pre-tax/per pay max (26 pays)||Per-pay reduction *|
|457(b) Annual Limit||$20,500||$22,500||$865||$649|
|457(b) Over Age 50 Catch-Up||$27,000||$30,000||$1,154||$865|
|457(b) Special Catch-Up||$41,000||$45,000||$1,731||$1,298|
|401(a) Defined Contribution||$61,000||$66,000||N/A||N/A|
|401(k) Annual Limit||$20,500||$22,500||$865||$649|
|401(k) Over Age 50 Catch-Up||$27,000||$30,000||$1,154||$865|
|Roth IRA **||$6,000||$6,500||N/A||N/A|
Please note: Special 457(b) catch-up contributions, if permitted by the plan, allow a participant for three years prior to the normal retirement age (as specified in the plan) to contribute the lesser of:
- Twice the annual limit ($45,000 in 2023) or
- The basic annual limit plus the amount of the basic limit not used in prior years (only allowed if not using age 50 or over catch-up contributions)
* Assumes 25% tax rate
IRS announces 401(k) limit increases to $22,500,” IE-2022-188, Internal Revenue Service (Oct. 21, 2022).
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Retirement Specialists are registered representatives of Nationwide Investment Services Corporation: Member FINRA. Nationwide representatives cannot offer investment, tax or legal advice. Consult your own counsel before making retirement plan decisions.
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