Save More for Retirement in 2024
On November 1, 2023, the IRS announced the Cost of Living Adjustments (COLAs) affecting the dollar limitations for retirement plans for 2024. In October, the Social Security Administration announced a modest benefit increase of 3.2%. Retirement plan limits also increased over the 2023 limits. COLA increases are intended to allow participant contributions and benefits to keep up with the “cost of living” from year to year. Here are the highlights from the new 2024 limits:
- The calendar year elective deferral limit increased from $22,500 to $23,000.
- The elective deferral catch-up contribution remains $7,500. This contribution is available to all participants aged 50 or older in 2024.
- The maximum available dollar amount that can be contributed to a participant’s retirement account in a defined contribution plan increased from $66,000 to $69,000. The limit includes both employee and employer contributions as well as any allocated forfeitures. For those over age 50, the annual addition limit increases by $7,500 to include catch-up contributions.
- The maximum amount of compensation that can be considered in retirement plan compliance has been raised from $330,000 to $345,000.
- Annual income subject to Social Security taxation has increased from $160,200 to $168,600.
