Stock image showing employees and their 401(k). (Photo: Shutterstock)

Largely due to inflation, the amount that individuals can contribute to 401(k) plans will increase to $22,500 in 2023 (the largest increase on record), up from the current $20,500, according to the IRS. The new contribution limit, which is a 9.8 percent increase, includes employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan.

The IRS announced the change on Friday and also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2023.

Other announced changes include:

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