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IRS Announces 2024 Cost-of-Living Adjustments Affecting Retirement Plans

by | Nov 1, 2023 |

By Ari Sonneberg

The Internal Revenue Service announced cost-of-living adjustments affecting certain dollar limitations for pension plans and other retirement-related limitations for 2024 in Notice 2023-75.

The following chart details 2024 retirement plan dollar limitation cost-of-living adjustments:

Limitation Description 2023 2024
Maximum annual benefit under a defined benefit plan under IRC Section 415(b)(1)(A) $265,000 $275,000
Maximum annual contribution to an individual’s defined contribution plan account under IRC Section 415(c) $66,000

(plus catch-up)


(plus catch-up)

Elective contribution limit under IRC Section 402(g)(1) (for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan) $22,500 $23,000
Maximum amount of annual compensation that may be taken into account for determining benefits or contributions to retirement plans under IRC Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) $330,000 $345,000
Dollar amount for determining maximum account balance in an employee stock ownership plan subject to a 5-year distribution period under IRC Section 409(o)(1)(C)(ii) $1,330,000 $1,380,000
Dollar amount used for determining the lengthening of the 5-year distribution period in an employee stock ownership plan under IRC Section 409(o)(1)(C)(ii) $265,000 $275,000
Amount of compensation to be a “key” employee under a “top-heavy” plan under IRC Section 416(i)(1)(A)(i) $215,000 $220,000
Dollar limitation used in the definition of “highly compensated employee” under IRC Section 414(q)(1)(B) $150,000 $155,000
Limitation under IRC Section 408(p)(2)(E) for salary deferral contributions to SIMPLE retirement accounts $15,500 $16,000
Limitation concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan under IRC Section 664(g)(7) $60,000 $60,000 (no adjustment)
Catch-up contribution limit for employees who are age 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan $7,500 $7,500 (no adjustment)
Minimum compensation amount under IRC Section 408(k)(2)(C) for simplified employee pensions (SEPs) $750 $750 (no adjustment)
IRA contribution limit $6,500 $7,000
Wage Base For Social Security Tax $160,200 $168,600*

*October, 12, 2023 SSA announcement

Note: The additional catch-up contribution limit to an IRA for individuals age 50 and over remains $1,000.

Please click here for more details on the changes made by IRS Notice 2023-75.