The 2024 retirement plan limits have recently been announced by the IRS.
These new limits are effective January 1, 2024.
If you’re an employee and a retirement plan participant, be sure to contact your employer as soon as possible if you wish to change your retirement plan salary deferrals for 2024. Of course, if you’re a Springwater client, we’re happy to assist!
If you’re an employer and either don’t have a retirement plan in place or have questions about your existing one, please contact us for a complimentary tailor-made proposal and comparison with your current plan. You’ll have happier, more satisfied employees while also saving money.
Do you have questions about saving and investing for retirement? Contact us today to see how our team at Springwater Wealth can help you.
401(k)s, 403(b)s, etc. The standard contribution limit for employee salary deferrals to a qualified retirement plan – 401(k), 403(b), most 457 plans, and the government’s Thrift Savings Plan – is increased to $23,000 for 2024 (was $22,500 for 2023).
The “Catch-up”. The “catch-up” deferral limit for these plans remains at $7,500 for 2024 (was $7,500 in 2023), so a person who is age 50 or older can defer a maximum of $30,500 in 2024 ($23,000 regular deferral plus a $7,500 catch-up).
Annual Defined Contribution Limit. The maximum “annual additions” limit (salary deferrals, plus profit sharing, plus forfeiture allocations, etc) to a defined contribution plan is increased to $69,000 for 2024 (was $66,000 for 2023). Note that the catch-up deferral is in addition to this, so the annual contribution limit for a person age 50 or older is $76,500.
SEP IRAs. The contribution limit for a SEP IRA in 2024 is increased to the lesser of (a) $69,000, or (b) 25% of the employee’s salary (was $66,000 in 2023). [Note that a special computation is required to determine the contribution amount for self-employed individuals contributing for themselves]. The compensation limit used in the savings calculation is increased to $345,000 for 2024 (was $330,000 for 2023).
Solo 401(k)s. The contribution limit for a Solo 401(k) in 2024 is increased to the lesser of (a) $69,000, or (b) 100% of the employee’s salary. Note that the catch-up deferral is in addition to this, so the annual contribution limit for a person age 50 or older is $76,500.
IRAs. The contribution limits for Traditional and Roth IRAs is increased to $7,000 in 2024 (was $6,500 in 2023). The catch-up contribution for a person age 50 or older remains at $1,000 in 2024, for a total of $8,000.
Simple IRAs. The contribution limit for a Simple IRA is increased to $16,000 for 2024 (was $15,500 in 2023). The catch-up contribution for a person age 50 or older remains at $3,500 in 2024 (was $3,500 in 2023), for a total of $19,500.
Defined Benefit Plans. Finally, the limitation on the annual benefit of a “defined benefit” plan is increased to $275,000 in 2024 (was $265,000 in 2023).
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