IRS Announces Retirement Plan Limits for 2024

Written by Vita | November 1, 2023

The Internal Revenue Service has announced the 2024 cost-of-living adjustments (COLAs) to the various dollar limits for retirement plans. The Social Security Administration (SSA) has also announced the taxable wage base for 2024:

	2024	2023
Elective Deferral Limit (401(k) & 403(b) Plans)	$23,000	$22,500
Catch-Up Contributions (Age 50 and over)	$7,500	$7,500
Annual Defined Contribution Limit	$69,000	$66,000
Annual Compensation Limit	$345,000	$330,000
Highly Compensated Employee Threshold	$155,000	$150,000
Key Employee Compensation	$220,000	$215,000
Social Security Wage Base	$168,600	$160,200

Definitions

Elective Deferral Limit: The maximum contribution that an employee can make to all 401(k) and 403(b) plans during the calendar year (IRC section 402(g)(1)).
Catch-up Contributions: The additional contribution amount that individuals age 50 or over can make above the Elective Deferral and Annual Contribution limits if permitted by the company's retirement plan.
Annual Contribution Limit: the maximum annual contribution amount that can be made to a participant's account (IRC section 415). This limit is expressed as the lesser of the dollar limit or 100% of the participant's compensation and is applied to the combination of employee contributions, employer contributions, and forfeitures allocated to a participant's account.
Annual Compensation Limit: The maximum compensation amount that can be considered in calculating contribution allocations and nondiscrimination tests. A plan cannot consider compensation in excess of this amount (IRC Section 401(a)(17)).
Highly Compensated Employee Threshold: The minimum compensation level established to determine highly compensated employees for purposes of non-discrimination testing (IRC Section 414(q)(1)(B)).
Social Security Wage Base: The maximum amount of earnings subject to Social Security payroll taxes.

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