Retirement Plan Limits Updated

In Notice 2023-75, the IRS recently announced the dollar limits and thresholds for qualified retirement plans in 2024, reflecting the latest cost-of-living adjustments. Here are some relevant amounts to be aware of along with an overview of all the changes here:

Contribution limits for 401(k)s and other defined contribution plans. The annual limit on contributions will increase to $23,000 (up from $22,500) for 401(k), 403(b) and 457 plans, as well as for Salary Reduction Simplified Employee Pension (SARSEP) plans. The annual limits will rise to $16,000 (up from $15,500) for Savings Incentive Match Plans for Employees (SIMPLEs) and SIMPLE IRAs.

Catch-up contributions. The annual limit on catch-up contributions for individuals age 50 or over will remain at $7,500 for 401(k), 403(b) and 457 plans, as well as for SARSEPs. The annual limit for SIMPLEs and SIMPLE IRAs will also remain at $3,500.

As you can see, most of these amounts have been adjusted upward to account for inflation. If your organization sponsors a qualified plan, be it a defined contribution plan or defined benefit plan, be sure to carefully note the changes. Then, as necessary, review and revise employee benefits communications, plan procedures and administrative forms. We can help you assess the impact of these adjustments.