IRS Contribution Limits for 2024

In 2024, employees will have the opportunity to increase their contributions to various retirement savings plans as the IRS has raised the contribution cap for 401(k), 403(b), most
457 plans, and the Thrift Savings Plan for federal employees.

Here is everything you need to know for 2024.

Retirement Plan Contribution Limits for 2024

The IRS has raised the contribution cap for 401(k), 403(b), most 457 plans, and the Thrift Savings Plan for federal employees to $23,000, a $500 increase from the 2023 limit.

Catch-Up Contributions

The catch-up contribution limit for those aged 50 and above in the above-mentioned plans will remain unchanged at $7,500 for 2024.

Combined Limit for Employee and Employer Contributions

The combined limit for employer and employee contributions to defined contribution plans will rise to $69,000 in 2024, up from $66,000 in 2023.

This increase, though smaller than the $2,000 hike seen in 2023, is still noteworthy for many employees striving to reach their retirement goals. 

New Limits For Defined Benefits Plans For 2024

The maximum annual benefit for 2024 through such a plan will be $275,000, increasing from
$265,000. This calculation is based on a specific formula for participants who separated
from service before 2024.

2024 IRA Contribution Limits

The annual contribution limit for individual retirement accounts (IRAs) in 2024 has been raised
to $7,000, up from $6,500.

The catch-up contribution limit for those aged 50 and over in IRAs remains at $1,000. These limits are influenced by whether the individual has an employer retirement plan and their income level.

What Should Employers Do?

Recent data indicates a decline in confidence among workers and retirees regarding their ability to maintain a comfortable retirement. And despite a decrease in the rate of inflation, a substantial number of workers still view inflation as a barrier to saving for retirement.

It is recommended for all business owners and HR pros to inform their employees/staff about the new IRS changes and encourage increased contributions to their retirement accounts; however, it is best to seek the advice of a financial professional to ensure proper planning.

Get Help with Retirement Plan Options for Your Business

If you are struggling with the updates to contribution limits, how to help employees save, or with getting retirement plan options set up for your business, Trivantus can help. 

Contact us today to see how we are already helping countless companies with their retirement planning and payroll contributions.