Employee 401(k) contributions for 2023 will top off at $22,500—a $2,000 increase from the $20,500 cap for 2022—the IRS announced on Oct. 21. Plan participants age 50 or older next year can contribute an additional $7,500, up $1,000 from 2022.

Inflation is at its highest level since 401(k) annual indexing began, causing 7 percent to 11 percent increases for most 2023 contribution limits. The annual cost-of-living adjustments (COLAs) reflect increases in the Consumer Price Index for All Urban Consumers (CPI-U) from the third quarter of 2021 to the third quarter of 2022. Read more.