IRA and 401(k) contribution limits for 2024

2020 401(k) limits, 2020 IRA contribution limits
November 16, 2023 | Alliant Retirement and Investment Services

The IRS recently announced the 2024 cost-of-living adjustments made to contribution limits and income thresholds for retirement plans. The new contribution limits reflect cost-of-living increases over the last year.

401(k)

2024 contribution limits for employee 401(k) plans will increase by $500 to $23,000.

2024 catch-up contribution limits for 401(k) participants aged 50 and older remains unchanged at $7,500.

Traditional IRAs (individual retirement account)

The annual contribution cap for individual retirement accounts (IRA) increased by $500 to $7,000 per eligible individual.

IRA catch-up contributions for those 50 and over, which are not indexed for inflation, remain capped at an additional $1,000 ($8,000 total IRA contribution).

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by a workplace retirement plan and have modified adjusted gross incomes (AGI) from $77,000 and $87,000, increased by $4,000.

For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by a workplace retirement plan, the income phase-out increases by $7,000 to a range of $123,000 to $143,000. 

For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the deduction phase-out range increased by $12,000 to between $230,000 and $240,000.

For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Roth IRAs

For married couples filing jointly, the income phase-out range for taxpayers contributing to a Roth IRA increased by $12,000 to between an AGI of $230,000 to $240,000.

For singles and heads of household, the income phase-out range for taxpayers contributing to a Roth IRA increased by $8,000 to between an AGI of $146,000 to $161,000.

For a married individual filing a separate return, the Roth IRA phase-out range is not subject to an annual cost-of-living adjustment and remains $0 to $10,000

 Summary of 2024 contribution limits and income thresholds vs 2023

      2023 2024
Individual Retirement Accounts (IRAs)                                                       
IRA Contribution Limit $6,500 $7,000
IRA Catch-Up Contributions 1,000 1,000
 
IRA AGI Deduction Phase-out Starting at 
   
Joint Return $116,000 $123,000
Single or Head of Household 73,000 77,000
 
SEP
 

 
 
SEP Minimum Compensation $750 $750
SEP Maximum Contribution 66,000 69,000
SEP Maximum Compensation 330,000 345,000
 
SIMPLE Plans 
   
SIMPLE Maximum Contributions $15,500 $16,000
Catch-up Contributions 3,500 3,500
 
401(k), 403(b), Profit-Sharing Plans, etc.     
 
 
 
 
Annual Compensation  $330,000 $345,000
Elective Deferrals 22,500 23,000
Catch-up Contributions 7,500 7,500
Defined Contribution Limits 73,500 76,500
ESOP Limits 1,330,000 1,380,000
 
Other
 
 
 
 
HCE Threshold $150,000 $155,000
Defined Benefit Limits 265,000 275,000
Key Employee 215,000 220,000
457 Elective Deferrals 22,500 23,000
Control Employee (board member or officer) 130,000 135,000
Control Employee (compensation-based) 265,000 275,000
Social Security Taxable Wage Limit 160,200 168,600

 

While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.

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