IRS Announces 2024 Retirement Plan Limits: Modest Increases

Lori Basilico
Locke Lord LLP
Contact
LinkedIn
Facebook
X
Send
Embed

The Internal Revenue Service announced the 2024 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2024.  Most of the dollar limits, including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, the annual compensation limit under 401(a)(17) and the maximum annual contribution limit under Code Section 415(c) will increase from 2023 limits.  The dollar limit for catch-up contributions (if age 50 or older) remains the same as the 2023 limit.

RETIREMENT PLAN LIMITS

  2024 Limits 2023 Limits
401(k)/403(b)/457(b) Elective Deferrals $23,000 $22,500
Catch-Up Contribution (plans other than SIMPLE plans) $7,500 $7,500
SIMPLE Plan Employee Deferrals $16,000 $15,500
SIMPLE Plan Catch-Up Contributions $3,500 $3,500
Plan Maximum Annual Contribution – Defined Contribution Plans (Section 415(c)) $69,000 $66,000
Maximum Annual Benefit – Defined Benefit Plans (Section 415(b)) $275,000 $265,000
Compensation Limit under Section 401(a)(17) $345,000 $330,000
Highly Compensated Employee Definition under Section 414(q) $155,000 $150,000
Key Employees Officer Compensation for Top-Heavy Plans $220,000 $215,000
ESOP limit for determining the maximum account balance subject to the 5-year distribution limit $1,380,000 $1,330,000
ESOP dollar amount used for determining the lengthening of the 5-year distribution period $275,000 $265,000

HEALTH SAVINGS ACCOUNT AND HIGH DEDUCTIBLE HEALTH PLAN LIMITS
Earlier this year, the IRS announced the inflation-adjusted amounts for health savings account and high-deductible health plans for 2024.  The HSA limit for self-only/family coverage will increase to $4,150 and $8,300, respectively for 2024. The maximum annual out-of-pocket expense limits for high deductible health plans for self-only and family coverage will increase in 2024.

  2024 Limits 2023 Limits
HSA Contribution — Annual Contribution Limit
Self-Only Coverage $4,150 $3,850
Family Coverage $8,300 $7,750
Catch-Up Contributions (age 55 or older) $1,000 $1,000
High Deductible Health Plan – Minimum Annual Deductible
Self-Only Coverage $1,600 $1,500
Family Coverage $3,200 $3,000
High Deductible Health Plan – Maximum Out of Pocket Limit
Self-Only Coverage $8.050 $7,500
Family Coverage $16,100 $15,000

HEALTH FLEXIBLE SPENDING ACCOUNTS
We are waiting for the IRS to release the health flexible spending account contribution rate for 2024.

  2024 Limit 2023 Limit
Health FSA Contribution Limit TBD $3,050
Carryover Amount TBD $610

SOCIAL SECURITY WAGES BASE
Social Security Wage Base

  2024 Limit 2023 Limit
Social Security (FICA) Wage Base $168,600 $160,200
Send Print Report

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Locke Lord LLP | Attorney Advertising

Written by:

Locke Lord LLP
Locke Lord LLP
Contact
more
less

Locke Lord LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign Up Log in
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide