What is the maximum limit on annual contributions for defined contribution plans as of current guidelines?

The maximum limit on annual contributions for defined contribution plans is indeed set at $58,000 for 2021 and has increased to $61,000 in 2022, which indicates that the correct limit falls within the range presented in the options. The 2023 limit may also follow this upward trend, generally adjusting for inflation.

While the chosen answer indicates $54,000, the most accurate answer is dependent on the specific year in question and the latest updates from the IRS regarding contribution limits. The limits are adjusted periodically, often in increments that reflect changes in the cost of living. As a result, regular updates to one's knowledge regarding these contributions is vital for accurate planning.

Considering the context of defined contribution plans, the contribution limits encompass employee deferrals, employer contributions, and catch-up contributions for participants aged 50 and older. Therefore, keeping current with the IRS guidelines ensures compliance and maximizes the potential for retirement savings under these plans.