The tax law places limits on the dollar amount of contributions to retirement plans and IRAs. IRC Section 415 requires the limits to be adjusted annually for cost-of-living increases.
The below table shows a three-year comparison (starting in 2020) of certain retirement plan limits. Plan sponsors should be reviewing these increases annually and adjusting their systems accordingly for compliance purposes. Also, individuals who intend to max out their contributions should be reviewing these adjustments annually to ensure they are updating their deferral elections in order to achieve their retirement goals.
Please reach out to your tax adviser for any questions you might have regarding retirement accounts.
Michael Guido, CPA