2024 Retirement Plan Limit Changes

December 1, 2023  | By David Lowe

The IRS recently announced that the maximum contribution for various investment accounts has increased for 2024.

401(k), 403(b), most 457 plans, Thrift Savings Plan

• Employee contribution limit: $23,000
  • That equals $958.33 per paycheck if you get paid twice a month
  • That equals $884.62 per paycheck if you get paid every two weeks
• Catch-up contribution for those 50 and older = $7,500
  • So, the total employee contribution for those 50 and older is up to $30,500
  • That equals $1,270.83 per paycheck if you get paid twice a month
  • That equals $1,173.08 if you get paid every two weeks
• Total overall 401(k) contribution limit (employee contributions + all employer contributions) = $69,000 ($76,500 including catch-up contribution)

IRA (traditional and Roth)*

• Contribution limit: $7,000
  • That equals $583.33 per month
• Catch-up contribution for 50 and older: no change – still $1,000
  • So, the total contribution for 50+ is up to $8,000
  • That equals $666.66 per month

SIMPLE IRA and SIMPLE 401(k)**

• Contribution limit: $16,000
• Catch-up contribution for 50 and older = $3,500
  • So, the total contribution for 50+ is up to $19,500

Health Savings Account (HSA)

• $4,150 single
  • That equals $172.92 if you get paid twice a month
  • That equals $159.62 if you get paid every two weeks
• $8,300 total for family
  • That equals $345.83 if you get paid twice a month
  • That equals $319.23 if you get paid every two weeks
• Catch-up for 55 and older: no change – still $1,000, meaning:
  • Single, 55 and older may contribute up to $5,150
  • Both spouses 55 and older, total family contribution up to $10,300
  • One spouse under 55 and other spouse 55+, total family contribution up to $9,300

IRA income, contribution eligibility

Phase-out ranges also have increased for 2024. The phase-outs, which are based on Adjusted Gross Income, determine whether a taxpayer may contribute to a Roth IRA. For workers covered by an employer retirement plan, phase-outs also dictate whether a traditional IRA contribution is tax-deductible. Those below the start of the phaseout may make full Roth contributions and/or may deduct all of their pre-tax IRA contributions. For those within the phaseout, Roth contributions and pre-tax IRA deductibility reduce on a prorated basis.

The new phase-out ranges are:

• Traditional IRA deductibility
  • Single: $77,000-$87,000
• Married filing jointly
  • $123,000-$143,000 (if the spouse making the contribution participates in an employer plan)
  • $230,000-$240,000 (if the spouse making the contribution does not participate in an employer plan)
• Roth IRA eligibility
  • Single and head of household: $146,000-$161,000
  • Married filing jointly: $230,000-$240,000

***SIMPLE IRA contribution limits

The SECURE Act 2.0 adds a new wrinkle for SIMPLE IRA plans, starting in 2024. Employees may contribute an extra 10% if:

1. their employer has fewer than 25 employees OR
2. the company has 26-100 employees and agrees to either:
3. a 4% employer match OR
4. a 3% non-elective contribution

In these cases, the annual contribution limits would be:

• $17,600 (regular contributions)
• $3,850 (catch-up contribution for age 50+)
• = $21,450 total contribution for age 50+