More Is Better


Though not always true in life, socking away more money for retirement is very important for most participants in employee sponsored retirement plans, so it comes as good news that the annual contribution limits for defined plans have been raised for 2024. Read on for the latest intel from the Internal Revenue Service (IRS).

Increased Opportunities To Save

Contribution limits have been raised by the IRS in an effort to keep in step with inflation. Specifically, as Plan Sponsor reports, for the 2024 tax year:


  • The annual contribution limit for workers who participate in 401(k), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan, will be increased to $23,000 from $22,500 in 2023. The annual IRA contribution will increase to $7,000 from $6,500.


  • Catch-up contributions for those 50 years and older in DC plans will remain at $7,500, adding up to a total allowed annual contribution of $30,500 for qualifying DC plans.


  • The $1,000 catch-up contribution for IRAs remains unchanged, allowing those aged 50 years and older to contribute up to $8,000 annually. The IRA catch-up was pegged to inflation by the SECURE 2.0 Act of 2022 but was not increased for 2024.


While keeping up with SECURE 2.0 action items, as well as the massive legislation’s optional provisions and technical corrections, plan sponsors may be relieved to be reminded: “The super catch-up contribution provision in the SECURE 2.0 Act of 2022 will not take effect until 2025. When it does, it will permit those aged from 60 through 63 to contribute the greater of $10,000 or half the ordinary catch-up amount (currently $7,500), both of which will be indexed to inflation starting in 2026.”


Other important shifts that do take place for 2024 involve the “income eligibility ranges for IRAs and the Saver’s Credit” which is also increased for 2024.  Note in particular:


  • For single taxpayers in a workplace plan, the phase-out range for traditional IRAs will increase to between $77,000 and $87,000 from between $73,000 and $83,000. For married couples, the amount will increase to between $123,000 and $143,000, up from between $116,000 and $136,000.


  • The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers will be $76,500 for married couples filing jointly, up from $73,000; $57,375 for heads of household, up from $54,750; and $38,250 for singles and married individuals filing separately, up from $36,500.


  • The amount individuals can contribute to their SIMPLE retirement accounts will be increased to $16,000, up from $15,500.


Good To Know

Observing that the IRS increases to saving limits for retirement plans are smaller than the 2023 increases, Groom Law Group reminds us: “The Social Security Administration and PBGC also recently announced adjustments for the Social Security wage base, PBGC premiums, etc., for next year.” To help employers keep track of limits and other key benefit and compensation items for 2024, the experts at Groom Law have compiled this handy 2024 Benefit and Contribution Limits Chart.

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