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.