401(k) Limit Increases to $23,000 for 2024; IRA Limit Rises to $7,000
Today, the Internal Revenue Service (IRS) announced a significant update for those contributing to their 401(k) plans. In 2024, the contribution limit will increase to $23,000, a notable rise from the previous limit of $22,500 in 2023.
Guidance on Cost of Living Adjustments
In addition to this announcement, the IRS released a technical guide detailing all cost of living adjustments impacting dollar limitations for pension plans and other retirement-related items for the 2024 tax year. This information can be found in Notice 2023-75, which is available on IRS.gov.
Changes in Contribution Limits for Various Plans
The increase in limit isn’t just for 401(k) plans. Employees participating in 403(b) plans, most 457 plans, and the federal government’s Thrift Savings Plan will also see their contribution limit rise to $23,000, up from $22,500.
IRA Annual Contribution Limit Increases
The annual contribution limit for an Individual Retirement Account (IRA) will also see an increase in 2024. The new limit will be $7,000, a rise from the previous $6,500.
IRA Catch-Up Contributions for Individuals Aged 50 and Above
The catch-up contribution limit for IRAs for individuals aged 50 and above has been modified under the SECURE 2.0 Act of 2022 (SECURE 2.0). This includes an annual cost of living adjustment, but the limit remains at $1,000 for 2024.
For more details about these and other cost of living adjustments related to retirement for 2024, refer to Notice 2023-75 on IRS.gov.