On November 1, 2023, the 2024 calendar year cost-of-living adjustments to the contribution and compensation limits for tax-qualified retirement plans were released by the Internal Revenue Service (IRS) in Notice 2023-75.
Quick Hits
- The elective deferral limit for 401(k) and 403(b) plans will increase to $23,000 for 2024, but the catch-up contribution limit remains at $7,500.
- The annual contribution limit for defined contribution plans (including deferrals and employer contributions) will increase to $69,000 for 2024.
- The limitation on compensation that can be taken into account under tax-qualified retirement plans will increase to $345,000 for 2024.
The 2024 adjustments, also known as COLAs, were modest compared to those made for 2023. Annual elective deferral limits will increase by only $500 and there is no increase for catch-up contributions. The increases shown below are effective January 1, 2024.
| Internal Revenue Code (IRC) or Regulation Section | 2024 | 2023 |
| Annual compensation limit: IRC §§ 401(a)(17) / 404(l) | $345,000 | $330,000 |
| Elective deferral limit: IRC §§ 402(g)(1) and 457(e)(15) | $23,000 | $22,500 |
| Catch-up contribution limit: IRC § 414(v)(2)(B)(i) | $7,500 | $7,500 |
| Defined benefit plan limit: IRC § 415(b)(1)(A) | $275,000 | $265,000 |
| Defined contribution plan limit: IRC § 415(c)(1)(A) | $69,000 | $66,000 |
| Highly compensated employee threshold: IRC § 414(q)(1)(B) | $155,000 | $150,000 |
| Employee stock ownership plan (ESOP) limits: IRC § 409(o)(1)(C) | $1,380,000 $275,000 | $1,330,000 $265,000 |
| Key employee dollar limit in top-heavy plan: IRC § 416(i)(1)(A)(i) | $220,000 | $215,000 |
| SIMPLE maximum contribution limit: IRC § 408(p)(2)(E) | $16,000 | $15,500 |
| SIMPLE catch-up contribution limit: IRC § 414(v)(2)(B)(ii) | $3,500 | $3,500 |
| Simplified employee pension (SEP) minimum compensation: IRC § 408(k)(2)(C) | $750 | $750 |
| SEP maximum compensation: IRC § 408(k)(3)(C) | $345,000 | $330,000 |
| Control employee: § 1.61-21(f)(5)(i) | $135,000 | $130,000 |
| Control employee: § 1.61-21(f)(5)(iii) | $275,000 | $265,000 |
| Social Security taxable wage base | $168,600 | $160,200 |
The IRS makes cost-of-living adjustments annually in response to
inflation. Each limit is rounded to a whole number, usually the
nearest $500 or $1,000, as prescribed by statute.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
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