2024 IRS COLA Limits for 401(k) Plans Released

On November 1, 2023, the IRS released the upcoming cost of living adjustments (COLA) for various retirement plan limitations that will take effect on January 1, 2024. Full COLA limits are reported by the IRS in IRS Notice 2023-75.

2024 welcomes increases across the board for most all plan-specific dollar limitations. 

What's Increased for 2024?

• Salary Deferral contribution limit has increased to $23,000.
  • This limit covers 401(k), 403(b), and 457(b) plans. It applies to plans offering Pre-Tax Elective Deferrals and/or Roth Elective Deferrals. A plan that provides for both still caps the total employee contributions (pre-tax, Roth, or a combination of the two) at this limit.
• The maximum defined contribution limit for an individual (the annual additions limit) has increased to $69,000.
  • This is the total amount any one individual can have contributed by or for themselves, It includes salary deferrals of $23,000 plus any employer contributions, collectively not exceeding $69,000. It is exclusive of age 50 catch-up amounts.
• The annual compensation limit (the maximum that is considered for qualified plans) has increased to $345,000.
  • Compensation is used for many plan purposes, including, but not limited to, employer allocation preparation and nondiscrimination testing.
• The Social Security Taxable Wage Base is now $168,600 per the SSA release.
  • For retirement plans that use an Integrated profit sharing formula, for example, should know that this limit has also increased.
• The dollar compensation limit under section 416(i)(1)(A)(i) for “key employee” in a top-heavy plan has increased from $215,000 to $220,000.
• The compensation limit used in the definition of a “highly compensated employee” (HCE) under 414(q)(1)(B) has increased from $150,000 to $155,000.

What's Not Increased?

• The 414(v)(2)(B)(i) dollar limitation for catch-up contributions to an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) remains $7,500.
  • Catch-up in this instance refers to the salary deferral contributions of a plan participant turning 50, or who is over age 50, in 2024.
• The 219(b)(5)(B) IRA Catch-Up Contributions remains at $1,000.
• The 414(v)(2)(B)(ii) dollar limitation for catch-up contributions to an applicable employer plan described in section 401(k)(11) or section 408(p) for individuals aged 50 or over remains $3,500.

2024 IRS Select COLA Limits Summary Chart

Check out our full Contribution Limit page for all the COLA limits plus historical limits. 

More Information on 2024 COLA Limit Increases

Learn more about these increases and how they impact your retirement plan by contacting Uniglobal and your Uniglobal consultant.

Additional information on limit changes for 2024 can be found in the IRS Retirement Topics page. The IRS page 401(k) limit increases to $23,000 for 2024, IRA limit rises to $7,000 expands on the highlights in this post. The IRS also provides a tool if you’d like to get a Retirement Savings Check-Up.