News You Can Use: 2024 Cost of Living Adjustments for Retirement Plans

November 27, 2023

The Internal Revenue Service recently announced its cost-of-living adjustments applicable to dollar limitations on benefits and contributions for retirement plans generally effective for Tax Year 2024 (see IRS Notice 2023-75). Most notably, the limitation on annual salary deferrals into a 401(k) or 403(b) plan will increase to $23,000, and the dollar threshold for highly compensated employees will increase to $155,000. The more significant dollar limits for 2024 are as follows:

Defined contribution plan annual additions limit

  • 2024: $69,000 | 2023: $66,000

Maximum elective deferral for 401(k) and 403(b) plans

  • 2024: $23,000 | 2023: $22,500

Maximum contribution limit or Governmental Section 457 plans

  • 2024: $23,000 | 2023: $22,500

Highly compensated employee pay threshold

  • 2024: $155,000 | 2023: $150,000

Key employee compensation in top-heavy tests

  • 2024: $220,000 | 2023: $215,000

Qualified plan compensation limit

  • 2024: $345,000 | 2023: $330,000

SIMPLE plan maximum elective deferral

  • 2024: $16,000 | 2023: $15,500

Social Security taxable wage base

  • 2024: $168,600 | 2023: $160,200

Catch-up contribution (age 50 or older) for 401(k), 403(b) and 457 plans

  • 2024: $7,500 | 2023: $7,500

Catch-up contribution (age 50 or older) for SIMPLE 401(k)

  • 2024: $3,500 | 2023: $3,500

Defined benefit annual plan limit

  • 2024: $275,000 | 2023: $265,000

If you have questions about retirement plan contributions, please contact SMA Services at tpa@sma.org.

Posted in SMAS News