Inflation Driving Up 2023 Retirement Plan Contribution Limits

Higher consumer prices this year will likely translate into record increases to the contribution limits federal regulators place on workplace retirement plans next year.

Asset management firm Mercer LLC projects a nearly 10% hike in the maximum yearly limit workers enrolled in 401(k), 403(b), and many 457 plans can make in 2023.

The IRS currently places a $20,500 cap on annual employee deferral limits, but Mercer Law and Policy analysts said those figures could increase to $22,500. A 5% jump in contribution limits in 2020 was the second highest increase in US history.

A rise in contribution rates usually signals ...