IRS Raises 401(k) Contribution Limit

  • Beginning in 2023, workers will be allowed to contribute up to $22,500 to their 401(k), an increase of $2,000, or about 9.8 percent — the most significant jump since 2007, when the limit was $15,500.
  • The IRS makes such cost-of-living adjustments annually, but in times of painfully high inflation, the increases are more significant and impactful for taxpayers.
  • The government reported last week that the Consumer Price Index, which measures a basket of everyday goods, rose 8.2 percent in September, much more quickly than expected. Core prices, excluding gasoline and food, jumped by 6.6 percent, the fastest rise since 1982.