IRS Announces 2024 Cost-of-Living Adjustments for Retirement Plans and for Health and Welfare Benefit Plans

Amanda Dernovshek, Julie LaVille Hamlet, Mindi Johnson
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This blog has been updated since November 8, 2022. The data below is current.

The IRS has announced the 2024 cost-of-living adjustments for retirement plan and health and welfare benefit plan limitations. The charts below set forth the applicable limitations.

Retirement Plans

Similar to previous years, the IRS has again increased the limits for several retirement plan limits for 2024. The rows below represent some of the important changes. The changed limitations are between the 2023 limits and the 2024 limits.

Retirement Plan Limitation

2023 Limit

2024 Limits

401(k) and 403(b) Employee Contribution Limit

$22,500

$23,000

"Catch-Up Contribution" Limit (age 50 and older)

$7,500

$7,500

Defined Contribution Maximum Contribution

$66,000

(plus “Catch-Up”)

$69,000

(plus “Catch-Up”)

Defined Benefit Annual Benefit Limit

$265,000

$275,000

Highly Compensated Employee Compensation

$150,000

$155,000

Top-Heavy Key Employee Officer Dollar Limit

$215,000

$220,000

Annual Compensation Limit

$330,000

$345,000

457(b) Plan Contribution Limit

$22,500

$23,000

Social Security Taxable Wage Base

$160,200

$168,600

A complete explanation of all changes can be found in Notice 2023-75.

Health and Welfare Benefit Plans

The changes in limitations that apply to health and welfare plans are steeper for 2024 than they were in 2023. Notably, the limits for amounts that may be set aside for a Health Savings Account has been increased by 7% for a family and 8% for an individual. The following chart outlines the changes to these limits, but a full explanation can be found in Notice 2023-23 and Notice 2023-34.

Health and Welfare Benefit Plan Limitation

2023 Limit

2024 Limit

Health FSA Contribution Limit

$3,050

$3,200

Health Savings Account (HSA) Contribution Limits

-    Family

-    Single

-    Catch-Up Limit (age 55 and older)

$7,750

$3,850

$1,000

$8,300

$4,150

$1,000

HSA Annual Deduction Minimums

-    Family

-    Single

$3,000

$1,500

$3,200

$1,600

HSA Out-of-Pocket Maximums

-    Family

-    Single

$15,000

$7,500

$16,100

$8,050

Qualified Transportation Fringe Benefit Monthly Limits

-    Qualified Parking

-    Transit Pass/Vanpooling

$300

$300

$315

$315

The dependent care assistance limit is currently $5,000 and has remained unchanged for a number of years.

 
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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.

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