The IRS is increasing the amount that individuals can contribute to various retirement plans in 2024.
The limits for employees participating in 401(k), 403(b) and most 457 plans, along with the federal government's Thrift Savings Plan, will rise from $22,500 to $23,000. The catch-up contribution limit for employees aged 50 and over who participate in these plans will remain at $7,500 for 2024.
The limit on annual contributions to an Individual Retirement Arrangement (IRA) will increase from $6,500 to $7,00,. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.
The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan remains $7,500 for 2024. Therefore, participants in each of those three plans, as well as the federal government's Thrift Savings Plan. who are 50 and older can contribute up to $30,500, starting in 2024. The catch-up contribution limit for employees 50 and over who participate in Savings Incentive Match Plans for Employees (SIMPLE) remains $3,500 for 2024.
The IRS also noted that the income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs, and to claim the Saver's Credit all increased for 2024.
Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions that are detailed in the IRS's announcement.
Additional changes made under SECURE 2.0 are as follows:
● The limitation on premiums paid with respect to a qualifying longevity annuity contract is $200,000. For 2024, this limitation remains $200,000;
● The IRS added an adjustment to the deductible limit on charitable distributions. For 2024, this limitation is increased to $105,000, up from $100,000; and
● The IRS added a deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity. For 2024, this limitation is increased to $53,000, up from $50,000.
The income limit for the Saver's Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $76,500 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.
Details on these and other retirement-related cost-of-living adjustments for 2024 are in Notice 2023-75.