by The Internal Revenue Service makes annual cost-of-living adjustments to key elements of tax-protected retirement plans such as 401(k) and 403(b) in response to inflation. On November 1, 2023, the agency announced the following adjustments effective January 1, 2024:
- The elective deferral limit for 401(k) and 403(b) plans (aka ’employee contributions’) increases to $23,000, an increase of $500 from the 2023 rate.
- No increase is made in the catch-up contribution 2023 limit of $7,500.
- The annual contribution limit for defined contribution plans (including deferrals and employer contributions) increase to $69,000.
- The limitation on compensation that can be taken into account under tax-qualified plans will increases $15,000 to $345,000.
Other retirement plan and related limits for 2024 were announced, including increasing the Social Security taxable wage base from $160,200 to $168,600.
For details on all the adjustments, see the IRS Notice 2023-75, https://www.irs.gov/pub/irs-drop/n-23-75.pdf.
