On November 1, 2023, the Internal Revenue Service (IRS) released Notice 2023-75, which announced the dollar limitations for benefits and contributions under qualified retirement plans for 2024, as adjusted for cost-of-living under Internal Revenue Code Section 415.
Separately, the Social Security Administration previously announced the taxable wage base for 2024.
Generally speaking, the amounts increased from 2023 to 2024, with the catch-up contribution limit being the exception.
The chart below shows the limitations effective January 1, 2024, as compared to those for 2023:
| PLAN LIMITATIONS |
Code Section |
2024 |
2023 |
| Elective Deferrals for 401(k), 403(b) and 457 plans |
402(g)(1) |
$23,000 |
$22,500 |
| Catch-up Contribution Limit (for age 50 and older) |
414(v)(2)(B)(i) |
$7,500 |
$7,500 |
| Annual Compensation Limit |
401(a)(17) |
$345,000 |
$330,000 |
| Defined Contribution Plan Limit |
415(c)(1)(A) |
$69,000 |
$66,000 |
| Defined Benefit Plan Limit |
415(b)(1)(A) |
$275,000 |
$265,000 |
| Definition of Highly Compensated Employee |
414(q)(1)(B) |
$155,000 |
$150,000 |
| Key Employee |
416(i)(1)(A)(i) |
$220,000 |
$215,000 |
| Social Security Wage Base |
|
$168,600 |
$160,200 |
If you sponsor a qualified retirement plan that is not a calendar-year plan, care must be taken in applying these limits, because some limits are calendar-year limits (for example, the limit on elective deferrals), while others are plan-year limits (for example, the annual compensation limit).
Plan sponsors should make sure to update their employee benefit plan systems to reflect the new limits as well as communicate the new limits to plan participants so that they can adjust any deferral elections for 2024.
If you have any questions about the 2024 limitations or any other matter related to your tax-qualified or other retirement plan, please contact any member of Calfee’s Employee Benefits and Executive Compensation practice group.
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