The IRS has announced the new retirement plan limits for 2024. Highlights include:
- The compensation limit used in determining benefits and contributions for both defined benefit and defined contribution plans has increased from $330,000 to $345,000.
- For defined benefit plans (including cash balance), the maximum annual benefit for a participant with at least ten years of participation and a normal retirement age between 62 and 65 increased from $265,000 to $275,000.
- For defined contribution plans (profit sharing and 401(k) plans), the maximum annual contribution for a participant increased from $66,000 to $69,000. While this limit includes salary deferrals, any catch-up contributions would be in addition to this limit.
- The limit on salary deferrals for 401(k) plans increased from $22,500 to $23,000. The limit on catch-up contributions for 401(k) plans, which are available to participants who attain age 50 by the end of the calendar year, remains at $7,500.
As 2024 approaches, now is the time to act if you want to set up a qualified plan for a 2023 calendar tax year. If you are interested in exploring the possibility of setting up a qualified plan for your business, please contact us.
You can find a printable version of the complete list of the new 2024 annual limits by visiting the Retirement Plan Limits page of our website.
