The IRS and Social Security Administration have announced the 2024 cost-of-living adjustments for retirement plans.
Here are some of the more significant limitations affecting employee benefit plans:
- The maximum amount that may be deferred under 401(k), 403(b) and 457(b) plans, not including catch-up deferrals, under Internal Revenue Code Section 402(g) limit, is increased from $22,500 to $23,000.
- The IRC Section 415 maximum annual benefit under a defined benefit plan is increased by $10,000 to $275,000.
- The IRC Section 415 maximum annual additions under a defined contribution plan will be increased by $3,000 to $69,000, subject to the overall limitation of 100% of compensation.
- The highly compensated employee threshold dollar limit is increased to $155,000.
- The maximum amount of compensation that may be considered for benefit purposes under a qualified plan will be increased from the current limit of $330,000 to $345,000.
- The catch-up deferrals to 401(k), 403(b) and 457 plans remain unchanged at $7,500. Please note that the catch-up deferrals are only available for plan participants who turn 50 at any time during the plan year and who may no longer make deferrals because of plan or regulatory limitations.
- The Social Security taxable wage base is increased by $8,400 to $168,600, which is more than double the average increase over the prior five-year period.