Federal: IRS Releases 2024 Retirement Plan Contribution Limits

On November 1, 2023, the IRS announced the following changes for 2024:

• The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans increases to $23,000, up from $22,500.
• The limit on annual contributions to an individual retirement account (IRA) increases to $7,000, up from $6,500. The IRA catch-up contribution limit for individuals 50 and over is not subject to an annual cost of living adjustment and remains at $1,000.
• The catch-up contribution limit for employees 50 and older who participate in 401(k), 403(b), Savings Incentive Match Plan for Employees (SIMPLE), and most 457 plans remain at $7,500. Participants in 401(k), 403(b), and most 457 plans who are 50 and older can contribute up to $30,500 in 2024. The catch-up contribution limit for employees 50 and older who participate in SIMPLE plans remains at $3,500.
• The income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs, and to claim the Saver’s Credit (also known as the Retirement Savings Contributions Credit) all increased for 2024.
• Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If, during the year, either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) The phaseout ranges for 2024 are as follows:

1. For single taxpayers covered by a workplace retirement plan, the phase-out range increases to between $77,000 and $87,000, up from between $73,000 and $83,000.
2. For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range increases to between $123,000 and $143,000, up from between $116,000 and $136,000.
3. For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range increases to between $230,000 and $240,000, up from between $218,000 and $228,000.
4. For a married individual filing a separate return and who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

• The income phase-out range for taxpayers making contributions to a Roth IRA increases to between $146,000 and $161,000 for singles and heads of household, up from between $138,000 and $153,000. For married couples filing jointly, the income phase-out range increases to between $230,000 and $240,000, up from between $218,000 and $228,000. The phase-out range for a married individual filing a separate return and who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
• The income limit for the Saver’s Credit for low- and moderate-income workers is $76,000 for married couples filing jointly, up from $73,000; $57,375 for heads of household, up from $54,750; and $38,250 for singles and married individuals filing separately, up from $36,500.
• The amount individuals can contribute to their SIMPLE retirement accounts increases to $16,000, up from $15,500.

Details on these and other retirement-related cost-of-living adjustments for 2024 are located in IRS Notice 2023-75.

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Posted Date: 2023-11-20

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