IRS Raises 401(k), IRA Contribution Limits for 2024
The agency just announced 2024 increases to a number of income ranges and limits tied to retirement accounts.
The Internal Revenue Service announced Wednesday that the amount individuals can contribute to their 401(k) plans in 2024 has increased to $23,000, up from $22,500 for 2023.
The IRS also issued technical guidance regarding all of the cost‑of‑living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2024 in Notice 2023-75.
Changes for 2024
The contribution limit for employees who participate in 401(k), 403(b) and most 457 plans, as well as the federal government’s Thrift Savings Plan is increased to $23,000, up from $22,500, the IRS said.
The limit on annual contributions to an IRA increased to $7,000, up from $6,500, the IRS said.
The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the Secure 2.0 Act of 2022 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,” the IRS stated.
“Therefore, participants in 401(k), 403(b), and most 457 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,” according to the IRS.
The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.
Income Phase-Outs for Contributions
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.
Here are the phase‑out ranges for 2024, as explained by the IRS:
- For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $77,000 and $87,000, up from between $73,000 and $83,000.
- For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $123,000 and $143,000, up from between $116,000 and $136,000.
- An IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
- 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 between $0 and $10,000.
- Income phase-out range for taxpayers making contributions to a Roth IRA is increased to between $146,000 and $161,000 for singles and heads of household, up from between $138,000 and $153,000.
- For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
- The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
- The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from $15,500.
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