The Internal Revenue Service (IRS) recently released Notice 2023-75, announcing the cost-of-living adjustments for 2024. These adjustments affect the amounts of money in which employees can contribute to 401(k) plans and individual retirement accounts (IRAs).
2024 limit increases
Important 2024 limits announced by the IRS include:
- The employee contribution limit for 401(k) plans, which has increased to $23,000.
- The catch-up contribution limit for 401(k), 403 (b), and most 457 plans and the Thrift Savings Plan, which will remain unchanged at $7,500.
- The employee contribution limit for IRAs, which has increased to $7,000.
- The IRA catch-up contribution limit (for individuals 50 years of age and older), which will remain unchanged at $1,000.
- The employee contribution limit for simple IRAs and simple 401(k) plans, which increased to $16,000.
- The limits defining a “highly compensated employee” (increasing to $155,000) and “key employee” (increasing to $220,000).
- The annual limit for defined contribution plans, which has increased to $69,000.
- The annual compensation limit, which has increased to $345,000.
For more information on the cost-of-living adjustments, refer to the IRS’s news release. If you have any questions, please contact your dedicated Creative Benefits, Inc. team member.