2024 ANNUAL CONTRIBUTION LIMITS

  • Contribution limits for 401(k)s, 403(b)s, 457(b)s, IRAs, Roth IRAs, HSAs, FSAs, SIMPLE IRAs, and SEP IRAs are all subject to inflation. While the contribution limits do not go up every year and while every account does not use the same formula for when there will be an increase, you will generally see an increased contribution every year or two.

    • Highlights of Changes for 2024

      The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan is increased to $23,000, up from $22,500.

      The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.

      The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan remains $7,500 for 2024. Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.

      The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2024.

      Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase‑out ranges for 2024:

      • For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $77,000 and $87,000, up from between $73,000 and $83,000.
      • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $123,000 and $143,000, up from between $116,000 and $136,000.
      • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
      • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

      The income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $146,000 and $161,000 for singles and heads of household, up from between $138,000 and $153,000. For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

      The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $76,500 for married couples filing jointly, up from $73,000; $57,375 for heads of household, up from $54,750; and $38,250 for singles and married individuals filing separately, up from $36,500.

      The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from $15,500.

      Additional changes made under SECURE 2.0 are as follows:

      • The limitation on premiums paid with respect to a qualifying longevity annuity contract to $200,000. For 2024, this limitation remains $200,000.
      • Added an adjustment to the deductible limit on charitable distributions. For 2024, this limitation is increased to $105,000, up from $100,000.
      • Added a deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity. For 2024, this limitation is increased to $53,000, up from $50,000.

      Details on these and other retirement-related cost-of-living adjustments for 2024 are in Notice 2023-75, available on IRS.gov.

    • Impact of SECURE 2.0 on 2024 limits
      1. The SECURE 2.0 Act (Act) increased the amount that an IRA or defined contribution plan could pay in premiums for a qualified longevity annuity contract to $200,000 for 2023. This limit remains the same for 2024.
      2. The Act authorized indexing of the catch-up contribution limit for IRAs. Despite this change being effective for 2024, the cost- of- living adjustment procedures did not result in an increase to the IRA catch-up contribution limit.
      3. Participants in SIMPLE 401(k) and SIMPLE IRA plans can take advantage of an increased deferral limit of $17,600 (i.e., 110% of the $16,000 annual limit) if their employer meets one of the following conditions:
        • has 25 or fewer employees receiving at least $5,000 of compensation, or
        • has more than 25 but not more than 100 employees and makes either a 4% matching contribution or a 3% nonelective contribution.

      The 10% increase in the annual limit also applies to the catch-up deferral limit available to participants who are age 50 or older.

Don’t let your clients miss an opportunity to achieve their savings goals!

To download the 2024 annual contribution limits

Click Here

FIDUCIARY RESPONSIBILITY TO MONITOR

Type of Limitation

2024

2023

2022

Elective Deferral Limit (401(k) and 403(b) Plans; Not Including Catch-Up Contributions) $23,000 $22,500 $20,500
Catch-Up Contribution Limit (401(k) and 403(b) Plans) $7,500 $7,500 $6,500
Elective Deferral Limit (SIMPLE Plans) $16,000 $15,500 $14,000
Catch-Up Contribution Limit (SIMPLE Plans) $3,500 $3,500 $3,000
Cash Balance/Defined Benefit Annual Limit $275,000 $265,000 $245,000
Defined Contribution Plan Limit $69,000 $66,000 $61,000
Annual Compensation Limit $345,000 $330,000 $305,000
Key Employee Threshold $220,000 $215,000 $200,000
Highly Compensated Employee Threshold $155,000 $150,000 $135,000
Income Subject to Social Security Tax $168,600 $160,200 $147,000

Below is a summary of the highlights to be aware of:

  • The annual 401(k) and 403(b) limit has increased to $23,000
  • The Elective Deferral limit (SIMPLE Plans) has increased to $16,000
  • The Cash Balance/Defined Benefit limit has increased to $275,000
  • The Defined Contribution Plan Limit increased to $69,000
  • The annual Compensation limit increased to $345,000
  • The Key Employee threshold increased $220,000
  • The HCE threshold increased to $155,000
  • The Income Subject to Social Security Tax increased to $168,600

2023 ANNUAL CONTRIBUTION LIMITS

  • Contribution limits for 401(k)s, 403(b)s, 457(b)s, IRAs, Roth IRAs, HSAs, FSAs, SIMPLE IRAs, and SEP IRAs are all subject to inflation. While the contribution limits do not go up every year and while every account does not use the same formula for when there will be an increase, you will generally see an increased contribution every year or two.

    • Highlights of Changes for 2024

      The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased to $20,500, up from $19,500.

      The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2022.

      Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase-out ranges for 2022:

      • For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to $68,000 to $78,000, up from $66,000 to $76,000.
      • For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to $109,000 to $129,000, up from $105,000 to $125,000.
      • For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to $204,000 to $214,000, up from $198,000 to $208,000.
      • For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

      The income phase-out range for taxpayers making contributions to a Roth IRA is increased to $129,000 to $144,000 for singles and heads of household, up from $125,000 to $140,000. For married couples filing jointly, the income phase-out range is increased to $204,000 to $214,000, up from $198,000 to $208,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

      The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $68,000 for married couples filing jointly, up from $66,000; $51,000 for heads of household, up from $49,500; and $34,000 for singles and married individuals filing separately, up from $33,000.

      The amount individuals can contribute to their SIMPLE retirement accounts is increased to $14,000, up from $13,500.

    • Key Employee Contribution Limits that Remain Unchanged

      The limit on annual contributions to an IRA remains unchanged at $6,000. The IRA catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.

      The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan remains unchanged at $6,500. Therefore, participants in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $27,000, starting in 2022. The catch-up contribution limit for employees aged 50 and over who participate in SIMPLE plans remains unchanged at $3,000.

      Details on these and other retirement-related cost-of-living adjustments for 2022 are in Notice 2021-61PDF, available on IRS.gov.

Don’t let your clients miss an opportunity to achieve their savings goals!

To download the 2023 annual contribution limits

Click Here

FIDUCIARY RESPONSIBILITY TO MONITOR

Type of Limitation

2023

2022

2021

Elective Deferral Limit (401(k) and 403(b) Plans; Not Including Catch-Up Contributions) $22,500 $20,500 $19,500
Catch-Up Contribution Limit (401(k) and 403(b) Plans) $7,500 $6,500 $6,500
Elective Deferral Limit (SIMPLE Plans) $15,500 $14,000 $13,500
Catch-Up Contribution Limit (SIMPLE Plans) $3,500 $3,000 $3,000
Cash Balance/Defined Benefit Annual Limit $265,000 $245,000 $230,000
Defined Contribution Plan Limit $66,000 $61,000 $58,000
Annual Compensation Limit $330,000 $305,000 $290,000
Key Employee Threshold $215,000 $200,000 $185,000
Highly Compensated Employee Threshold $150,000 $135,000 $130,000
Income Subject to Social Security Tax $160,200 $147,000 $142,800

Below is a summary of the highlights to be aware of:

  • The annual 401(k) and 403(b) limit has increased to $22,500
  • The Elective Deferral limit (SIMPLE Plans) has increased to $15,500
  • The Cash Balance/Defined Benefit limit has increased to $265,000
  • The Defined Contribution Plan limit increased to $66,000
  • The annual Compensation limit increased to $330,000
  • The Key Employee Threshold increased $215,000
  • The HCE threshold increased to $150,000
  • The Income Subject to Social Security Tax increased to $160,200
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