What is the maximum elective deferral limit for a 401(k) plan in 2023, including catch-up contributions?

In 2023, the maximum elective deferral limit for a 401(k) plan is set at $22,500. For participants aged 50 and over, an additional catch-up contribution of $7,500 is allowed, bringing the total maximum contribution to $30,000.

The correct answer reflects the understanding of both the standard deferral limit and the catch-up provision for older participants. This distinction is critical for planning retirement savings strategies and ensuring that individuals maximize their contributions based on their age and retirement goals. By being aware of these limits, employees can take advantage of tax-deferred savings opportunities, which can significantly enhance their retirement readiness.