Retirement contribution limits rise for 2024
Introduction to the new limits
The IRS has announced new contribution limits for retirement plans in 2024, with increases reflecting the cost-of-living adjustments.
These changes include higher contribution possibilities for 401(k) plans and Individual Retirement Accounts (IRAs).
Also read - Inherited IRA distribution rules
Adjustments to 401(k) plans
The new year brings a boost to 401(k) contributions, with the limit now set at $23,000, up by $500.
This applies to employees who are part of:
- 401(k) plans
- 403(b) plans
- Most 457 plans
- The federal government's Thrift Savings Plan
IRA contribution limit increases
IRA contributors will see their annual limit increase to $7,000 from $6,500.
The catch-up contribution limit for those aged 50 and above remains steady at $1,000.
Details on catch-up contribution limits
For those 50 and older, the catch-up contribution limit is unchanged at $7,500 for:
- 401(k) plans
- 403(b) plans
- Most 457 plans
- The federal government's Thrift Savings Plan
This means eligible participants can contribute up to $30,500 in 2024.
The catch-up limit for SIMPLE plans is still $3,500.
Adjusted income ranges for IRA eligibility
Income ranges for IRA contributions have increased, affecting eligibility for deductible contributions to traditional IRAs, Roth IRA contributions, and the Saver's Credit.
Phase-out ranges for traditional IRAs
The phase-out ranges for traditional IRA contributions are now:
- Single taxpayers with a workplace retirement plan: $77,000 to $87,000
- Married couples filing jointly where one spouse has a workplace plan: $123,000 to $143,000
- Contributors without a workplace plan but with a spouse who has one: $230,000 to $240,000
- Married filing separately with a workplace plan: $0 to $10,000 (unchanged)
Phase-out ranges for Roth IRAs
The new phase-out ranges for Roth IRA contributions are:
- Singles and heads of household: $146,000 to $161,000
- Married couples filing jointly: $230,000 to $240,000
- Married filing separately: $0 to $10,000 (unchanged)
Saver's credit income limits
The Saver's Credit income limits have been adjusted to:
- Married filing jointly: $76,500
- Head of household: $57,375
- Single and married filing separately: $38,250
Contribution limits for SIMPLE retirement accounts
The contribution limit for SIMPLE retirement accounts is now $16,000, an increase from $15,500.
Additional changes from the SECURE 2.0 Act
Further changes from the SECURE 2.0 Act include:
- The limit for qualifying longevity annuity contract premiums remains at $200,000.
- The deductible limit for charitable distributions is now $105,000.
- A new deductible limit for distributions to split-interest entities is set at $53,000.
For more information on these and other retirement-related adjustments, see Notice 2023-75.