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Up, Up, and Away! Inflation-Adjusted 401(k) Maximum Salary Deferral at $23,000 for 2024

November 14, 2023 (4 min read)

The Internal Revenue Service recently announced its 2024 inflation adjustments to many retirement plan limits. For example, the amount individuals can contribute to their 401(k), 403(b), and most 457 plans will increase to $23,000 in 2024, up $500 from the 2023 max of $22,500. If you’re age 50 and older the catch-up contribution remains at $7,500, but it adds to more than $30,000 that can be saved annually for those eligible individuals who can—and do.  That’s so much more than the maximum IRA contribution limit. That amount increases from $6,500 in 2023 to $7,000 in 2024, with a catch-up of $1,000 for those age 50 or older at year end.  By some reports, there were 175,000 defined benefit plans in the private sector in the early 1980s.  That number is down below 50,000, with many being frozen. So, it’s important that employees save for their retirement. Reminding them of the limits can help.

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DID YOU KNOW? Practical Guidance Tax has added two new topics to the State Law Comparison Tool: (1) Corporate Income Tax Rates and (2) Personal Income Tax Rates. California and Hawaii have the highest personal income tax rates, at 13.3% and 11%, respectively.

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