Retirement planning is an important aspect of financial management, and as we head into 2023, it’s essential to know the latest contribution limits for retirement plans such as 401(k) and IRA. The IRS has announced new contribution limits for 2023, which will impact the amount you can contribute to your retirement plan. Additionally, some employers in California are required to offer retirement plans to their employees, and failure to do so could result in penalties. In this article, we will delve into the new contribution limits for 401(k) and IRA and explore which employers in California are obligated to offer retirement plans.
Starting in 2023, the contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $22,500.
Additionally, for employees aged 50 and over who participate in these plans can make catch-up contributions of up to $7,500, meaning they can contribute up to $30,000 in total.
For employees aged 50 and over who participate in SIMPLE plans, the catch-up contribution limit is increased to $3,500 for 2023.
The limit on annual contributions to an IRA is also increased to $6,500 for 2023, while the IRA catch-up contribution limit for individuals aged 50 and over remains $1,000.
CalSavers Retirement Savings Program
CalSavers is a retirement savings program for private sector workers in California whose employers do not offer a retirement plan. With no employer fees, it allows employees to start saving early, and employers can help their employees with minimal responsibilities.
Cal Savers Registration Deadlines by Business Size:
Size of Business Deadline
5 or more employees June 30, 2022 (Deadline Passed)
1 or more employees December 31, 2025
The number of employees is based on the average number of employees reported on the previous year’s DE9C quarterly EDD filings. Even if none of your employees choose to participate, you are required to register.
To find out more about CalSavers, reach out to one of our Smith Marion associates or visit: https://www.calsavers.com/