New 401(k) Contribution Limits: Retirement Savings Boost

Good news: Employees will be able to sock away a little bit more money into their retirement accounts next year, the IRS recently announced. Here’s the key info to share with workers about the new 401(k) contribution limits.

In Notice 2023-75, the Service issued guidance on cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024.

401(k) contribution limits get a bump

Each year, the Service announces updated contribution limits for employees’ retirement plans. Here’s a rundown of the changes in 2024:

• Employees will be able to contribute up to $23,000 to their 401(k) plans, up from $22,500 in 2023. Workers can contribute the same amount to 403(b) and most 457 plans, plus federal government thrift savings plans (TSPs).
• The catch-up contribution limit for employees aged 50 or older for 401(k), 403(b), 457 and TSP plans remains $7,500 for 2024. That sets the total contribution limit at $30,500.
• Contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under SECURE 2.0 to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.
• For single taxpayers covered by a Workplace Retirement Plan, the phase-out range is between $77,000 to $87,000, up from $73,000 to $83,000.
• For married couples filing jointly, if the spouse putting money toward an IRA is also covered by a workplace retirement plan, the phase-out range is between $123,000 and $143,000. The range in 2023 was between $116,000 and $136,000.