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 Section20242023
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.

Follow and Subscribe

LinkedIn | Instagram | Webinars | Podcasts

Author


Browse More Insights

Practice Group

Employee Benefits and Executive Compensation

Ogletree Deakins has one of the largest teams of employee benefits and executive compensation practitioners in the United States. As part of a firm that focuses on labor and employment law, our Employee Benefits Practice Group has a special ability to relate technical experience to the client’s “big picture” issues.

Learn more

Sign up to receive emails about new developments and upcoming programs.

Sign Up Now