New Dollar Limits Applicable to Retirement Plans for 2024
The Internal Revenue Service and the Social Security Administration have announced the cost of living adjustments (COLA) applicable to dollar limitations for retirement plans and the Social Security wage base for 2024. Many of the limits that applied to the 2023 plan year changed for the 2024 plan year.
Employers should make sure that the individuals in charge of their payroll systems are aware of these limits. Also, employee communications and forms should be reviewed and updated as necessary to reflect these 2024 dollar limits.
| Limit | 2023 | 2024 |
| Maximum annual compensation that may be taken into account for determining benefits or contributions | $330,000 | $345,000 |
| Maximum elective deferral contribution limit for employees who participate in 401(k), 403(b) and most 457 plans | $22,500 | $23,000 |
| Maximum 401(k) and 403(b) and governmental 457(b) catch-up contribution limit for participants age 50 or older | $7,500 | $7,500 |
| Defined contribution and SEP maximum annual addition* | $66,000 | $69,000 |
| Defined benefit maximum annual benefit | $265,000 | $275,000 |
| Key employee officer compensation for top-heavy plan | $215,000 | $220,000 |
| Highly compensated employee (HCE) | $150,000 | $155,000 |
| Social Security taxable wage base (FICA) | $160,200 | $168,600 |
*Limit not applicable to catch-up contributions.
If you have any questions concerning the plan dollar limits or would like assistance with your employee retirement plans, please contact any member of our Employee Benefits practice group.