IRS Announces 2024 Retirement Plan Limits

The IRS recently announced the 2024 cost-of-living adjustments to various benefit and contribution limits applicable to retirement plans. The IRS modestly increased the applicable limits for 2024. The following limits apply to retirement plans in 2024:

  • The limit on elective deferrals under 401(k), 403(b), and eligible 457(b) plans increased to $23,000.
  • The limit on additional catch-up contributions by participants aged 50 or older remains at $7,500. This means that the maximum amount of elective deferral contributions for those participants in 2024 is $30,500.
  • The Internal Revenue Code (“Code”) Section 415 annual addition limit is increased to $69,000 for 401(k) and other defined contribution plans, and the annual benefit limit is increased to $275,000 for defined benefit plans.
  • The limit on the annual compensation that can be taken into account by qualified plans under Code Section 417 is increased to $345,000.
  • The dollar level threshold for becoming a highly compensated employee under Code Section 414(q) increased to $155,000 (which, under the look-back rule, applies to HCE determinations in 2025 based on compensation paid in 2024).
  • The dollar level threshold for becoming a “key employee” in a top-heavy plan under Code Section 416(i)(1) is increased to $220,000.

We have compiled a chart summarizing the key limits below, including how they compare with those in the previous year. For a printable version of the chart, please click here.

2024 2023 2022
401(k)/403(b) Plan Deferral Limit $23,000 $22,500 $20,500
Catch-Up Contributions (401(k), 403(b) & Governmental 457(b) Plans) $7,500 $7,500 $6,500
Defined Contribution Dollar Limit $69,000 $66,000 $61,000
Defined Benefit Annual Limit $275,000 $265,000 $245,000
Pay Threshold for Determining Highly Compensated Employee $155,000 (for determinations in 2025) $150,000 (for determinations in 2024) $135,000 (for determinations in 2023)
Annual Compensation Limit $345,000 $330,000 $305,000
457(b) Plan Deferral Limit $23,000 $22,500 $20,500
Social Security Taxable Wage Base $168,600 $160,200 $147,000

Contact your Faegre Drinker benefits attorney with questions or for assistance with implementing the new retirement plan limits.

The material contained in this communication is informational, general in nature and does not constitute legal advice. The material contained in this communication should not be relied upon or used without consulting a lawyer to consider your specific circumstances. This communication was published on the date specified and may not include any changes in the topics, laws, rules or regulations covered. Receipt of this communication does not establish an attorney-client relationship. In some jurisdictions, this communication may be considered attorney advertising.

About Author: Sarah Bassler Millar

Sarah Bassler Millar counsels employer plan sponsors and service providers on the design, implementation, and administration of health and welfare benefits, retirement plans and nonqualified plans. She routinely advises on fiduciary governance matters, including current best practices and the implications of the prohibited transaction rules. When counseling clients, she focuses on identifying solutions that effectively mitigate risks and manage identified compliance issues, while taking into account the client’s employee recruitment and retention goals. Sarah formerly led the firm’s benefits and executive compensation group. View all posts by , , and

About Author: Mark Rosenfeld

An employee benefits lawyer, Mark Rosenfeld counsels employers, plan sponsors and administrators on the design, administration and governance of retirement plans (such as 401(k) plans) and welfare plans (such as health plans). He also drafts executive compensation arrangements, equity incentive plans and severance plans. Mark provides detailed analysis and advice on IRS Code § 280G golden parachute provisions in M&A transactions. View all posts by , , and

About Author: Dawn Sellstrom

Dawn Sellstrom focuses her employee benefits practice on health and welfare benefits. Dawn advises employers on health and welfare benefits of all types, and on compliance under the Employee Retirement Income Security Act (ERISA), Internal Revenue Code, Health Insurance Portability and Accountability Act (HIPAA), and related federal and state laws and regulations. She has significant experience assisting employers with health care reform strategy and compliance, consumer-driven health care arrangements, and health and welfare plan governance, including plan design and fiduciary responsibilities. View all posts by , , and

About Author: Inés Sosa

Inés Sosa counsels employee benefit plans on all aspects of the law. She utilizes her experience to assist clients in plan design, regulatory compliance and legal issues relating to plan investments. Inés assists clients in understanding ERISA law, tax law and employment law. View all posts by , , and

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