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Quick Hits
- The elective deferral limit for 401(k) and 403(b) plans will increase to $23,000 for 2024, but the catch-up contribution limit remains at $7,500.
- The annual contribution limit for defined contribution plans (including deferrals and employer contributions) will increase to $69,000 for 2024.
- The limitation on compensation that can be taken into account under tax-qualified retirement plans will increase to $345,000 for 2024.
The 2024 adjustments, also known as COLAs, were modest compared to those made for 2023. Annual elective deferral limits will increase by only $500 and there is no increase for catch-up contributions. The increases shown below are effective January 1, 2024.
| Internal Revenue Code (IRC) or Regulation Section | 2024 | 2023 |
| Annual compensation limit: IRC §§ 401(a)(17) / 404(l) | $345,000 | $330,000 |
| Elective deferral limit: IRC §§ 402(g)(1) and 457(e)(15) | $23,000 | $22,500 |
| Catch-up contribution limit: IRC § 414(v)(2)(B)(i) | $7,500 | $7,500 |
| Defined benefit plan limit: IRC § 415(b)(1)(A) | $275,000 | $265,000 |
| Defined contribution plan limit: IRC § 415(c)(1)(A) | $69,000 | $66,000 |
| Highly compensated employee threshold: IRC § 414(q)(1)(B) | $155,000 | $150,000 |
| Employee stock ownership plan (ESOP) limits: IRC § 409(o)(1)(C) | $1,380,000 $275,000 | $1,330,000 $265,000 |
| Key employee dollar limit in top-heavy plan: IRC § 416(i)(1)(A)(i) | $220,000 | $215,000 |
| SIMPLE maximum contribution limit: IRC § 408(p)(2)(E) | $16,000 | $15,500 |
| SIMPLE catch-up contribution limit: IRC § 414(v)(2)(B)(ii) | $3,500 | $3,500 |
| Simplified employee pension (SEP) minimum compensation: IRC § 408(k)(2)(C) | $750 | $750 |
| SEP maximum compensation: IRC § 408(k)(3)(C) | $345,000 | $330,000 |
| Control employee: § 1.61-21(f)(5)(i) | $135,000 | $130,000 |
| Control employee: § 1.61-21(f)(5)(iii) | $275,000 | $265,000 |
| Social Security taxable wage base | $168,600 | $160,200 |
The IRS makes cost-of-living adjustments annually in response to inflation. Each limit is rounded to a whole number, usually the nearest $500 or $1,000, as prescribed by statute.
Ogletree Deakins’ Employee Benefits and Executive Compensation Practice Group regularly provides legal updates in response to developments in employee benefits law. Please see the Employee Benefits and Executive Compensation blog for more information.
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