FLASHPOINT: IRS ANNOUNCES 2024 COST OF LIVING ADJUSTMENTS TO VARIOUS RETIREMENT PLAN LIMITS
The IRS just released the cost-of-living adjustments for various retirement plan limitations that will take effect on January 1, 2024. The limits that increased for 2024 are shown below in blue bold italics.
The 2024 and prior years’ limits are as follows:
| Limit Type | For Calendar Year | |||
| 2024 | 2023 | 2022 | 2021 | |
| Maximum DB Plan Benefit (IRC §415(b)) (applies to limitation years ending in indicated year) | $275,000 | $265,000 | $245,000 | $230,000 |
| Max DC Annual Addition (IRC §415(c)) (applies to limitation years ending in indicated year) | $69,000 | $66,000 | $61,000 | $58,000 |
| Salary Deferral Limit (IRC §402(g)) | $23,000 | $22,500 | $20,500 | $19,500 |
| Catch-up Limit for 401(k), 403(b), 457 plans (applies to calendar year) | $7,500 | $7,500 | $6,500 | $6,500 |
| HCE Compensation (applies to lookback years in indicated year) | $155,000 | $150,000 | $135,000 | $130,000 |
| Max Plan Compensation for Retirement Plan Purposes (IRC §401(a)(17)) (applies to plan years beginning in indicated year) | $345,000 | $330,000 | $305,000 | $290,000 |
| Key Employee: Officer | $220,000 | $215,000 | $200,000 | $185,000 |
| Key Employee: 1% Owner | $150,000 | $150,000 | $150,000 | $150,000 |
| Social Security Taxable Wage Base for OASDI Contributions | $168,600 | $160,200 | $147,000 | $142,800 |
| 457(b) Contribution Limit | $23,000 | $22,500 | $20,500 | $19,500 |
| SIMPLE Salary Deferral Limit | $16,000 | $15,500 | $14,000 | $13,500 |
| SIMPLE Catch-up Limit | $3,500 | $3,500 | $3,000 | $3,000 |
| IRA Contribution Limit | $7,000 | $6,500 | $6,000 | $6,000 |
| SEP Threshold | $750 | $750 | $650 | $650 |
| ESOP: 5-year Distribution Factor | $275,000 | $265,000 | $245,000 | $230,000 |
| ESOP: Account Balance | $1,380,000 | $1,330,000 | $1,230,000 | $1,165,000 |
| Premiums for QLACs | $200,000 | $200,000 | $145,000 | $135,000 |
We wish all of you a healthy and prosperous 2024! If you have any questions, please let us know. Remember: we are your ERISA solution!
- Posted by Ferenczy Benefits Law Center
- On November 1, 2023