Retirement account contribution limits are adjusted for inflation each year. Inflation has moderated in recent months. Some contribution limits and income limits are projected to go up in 2025.
Before the IRS publishes the official adjustments for the next year in late October or early November, I calculate them using the published inflation numbers by the same rules the IRS uses as stipulated by law. I’ve maintained a track record of 100% accuracy ever since I started doing these calculations. The IRS Notice 2024-80 confirmed everything I have here.
- 2024 2025 401k/403b/457/TSP Elective Deferral Limit
- 2024 2025 Annual Additions Limit
- 2024 2025 SEP-IRA Contribution Limit
- 2024 2025 Annual Compensation Limit
- 2024 2025 Highly Compensated Employee Threshold
- 2024 2025 SIMPLE 401k and SIMPLE IRA Contribution Limit
- 2024 2025 Traditional and Roth IRA Contribution Limit
- 2024 2025 Deductible IRA Income Limit
- 2024 2025 Roth IRA Income Limit
- 2024 2025 Healthcare FSA Contribution Limit
- 2024 2025 HSA Contribution Limit
- 2024 2025 Saver’s Credit Income Limit
- All Together
- 2024 2025 Tax Brackets and Standard Deduction
2024 2025 401k/403b/457/TSP Elective Deferral Limit
The 401k/403b/457/TSP contribution limit is $23,000 in 2024. It will go up by $500 to $23,500 in 2025.
If you are age 50 or over by December 31, the catch-up contribution limit is $7,500 in 2024. It will stay the same at $7,500 in 2025.
If your age is 60 through 63 by December 31, 2025, you have a higher catch-up limit in 2025. It’ll be $11,250 in 2025.
If your prior year’s wages from the employer were over $145,000, your 2024 catch-up contribution must go to a Roth subaccount in the plan. The limit will be the same at $145,000 in 2025. The IRS has postponed enforcement of this rule.
Employer match or profit-sharing contributions aren’t included in these limits. If you work for multiple employers in the same year or if your employer offers multiple plans, you have one single employee contribution limit for 401k, 403b, and the federal government’s Thrift Savings Plan (TSP) across all plans.
The 457 plan limit is separate from the 401k/403b/TSP limit. You can contribute the maximum to both a 401k/403b/TSP plan and a 457 plan.
2024 2025 Annual Additions Limit
The total contributions from both the employer and the employee to all defined contribution plans by the same employer is $69,000 in 2024. It will increase to $70,000 in 2025.
The age-50-or-over catch-up contribution is separate from this limit. If you work for multiple employers in the same year, you have a separate annual additions limit for each unrelated employer.
2024 2025 SEP-IRA Contribution Limit
If you have self-employment income, you can contribute a percentage of your self-employment income to a SEP-IRA. The SEP-IRA contribution limit is always the same as the annual additions limit for a 401k plan. It is $69,000 in 2024, and it will increase to $70,000 in 2025.
Because the SEP-IRA doesn’t allow employee contributions, unless your self-employment income is well above $200,000, you have a higher contribution limit if you use a solo 401k. See Solo 401k When You Have Self-Employment Income.
2024 2025 Annual Compensation Limit
The maximum annual compensation that can be considered for making contributions to a retirement plan is always 5x the annual additions limit. Therefore the annual compensation limit is $345,000 in 2024. It will increase to $350,000 in 2025.
2024 2025 Highly Compensated Employee Threshold
If your employer limits your contribution because you’re a Highly Compensated Employee (HCE), the minimum compensation to be counted as an HCE is $155,000 in 2024. It will go up to $160,000 in 2025.
2024 2025 SIMPLE 401k and SIMPLE IRA Contribution Limit
Some smaller employers offer a SIMPLE 401k or a SIMPLE IRA plan instead of a regular 401k plan. SIMPLE 401k and SIMPLE IRA plans have a lower contribution limit than standard 401k plans. The contribution limit for SIMPLE 401k and SIMPLE IRA plans is $16,000 in 2024. It will go up to $16,500 in 2025.
Employers with fewer than 25 employees and larger employers that contribute more to the plan have a higher contribution limit. The regular contribution limit to their SIMPLE plans is $17,600 in 2024 and 2025.
If you are 50 or over by December 31, 2024, the catch-up contribution limit in a SIMPLE 401k or SIMPLE IRA plan is $3,500 in 2024 ($3,850 for smaller employers). It will be the same $3,500 in 2025 for ages 50-59 and 64 and over and $5,250 for ages 60 through 63.
Employer contributions to a SIMPLE 401k or SIMPLE IRA plan aren’t included in these limits.
2024 2025 Traditional and Roth IRA Contribution Limit
You need taxable compensation (“earned income”) to contribute to a Traditional or Roth IRA but there’s no age limit. The Traditional IRA or Roth IRA contribution limit is $7,000 in 2024. It will stay the same at $7,000 in 2025.
If you are age 50 or over by December 31, the catch-up limit is $1,000 in 2024. It will stay the same at $1,000 in 2025.
The IRA contribution limit is shared between the Traditional IRA and the Roth IRA. If you contribute the maximum to a Roth IRA, you can’t contribute the same maximum again to a Traditional IRA, and vice-versa.
The IRA contribution limit and the 401k/403b/TSP or SIMPLE contribution limit are separate. You can contribute the respective maximum to both a 401k/403b/TSP/SIMPLE plan and a Traditional IRA or Roth IRA.
2024 2025 Deductible IRA Income Limit
The income limit for taking a full deduction for your contribution to a Traditional IRA while participating in a workplace retirement plan in 2024 is $77,000 for single filers and $123,000 for a married couple filing jointly. The deduction completely phases out when your income goes above $87,000 in 2024 for singles and $143,000 for married filing jointly.
The full-deduction limits will go up in 2025 to $79,000 for single filers and to $126,000 for a married couple filing jointly. The deduction will completely phase out when your income goes above $89,000 in 2025 for singles; and above $146,000 for married filing jointly.
When you’re not covered in a workplace retirement plan but your spouse is, the income limit for taking a full deduction for your contribution to a Traditional IRA is $230,000 in 2024. The deduction completely phases out when your joint income goes above $240,000 in 2024.
The full-deduction limit will go up to $236,000 in 2025. The deduction completely phases out when your joint income goes above $246,000 in 2025.
When you exceed the income limit for taking a deduction for contributing to a Traditional IRA, consider contributing to a Roth IRA instead.
2024 2025 Roth IRA Income Limit
The income limit for contributing the maximum to a Roth IRA depends on your filing status. It’s $146,000 for singles and $230,000 for married filing jointly in 2024. These limits will go up to $150,000 for singles and $236,000 for married filing jointly in 2025.
You can’t contribute anything directly to a Roth IRA when your income goes above $161,000 in 2024 for singles and $240,000 in 2024 for married filing jointly. These limits will go up to $165,000 for singles and $246,000 for married filing jointly in 2025.
Your contribution eligibility is prorated in the income phase-out range. When you exceed the income limit for contributing to a Roth IRA, consider doing the Backdoor Roth.
2024 2025 Healthcare FSA Contribution Limit
The Healthcare FSA contribution limit is $3,200 per person in 2024. It will go up to $3,300 in 2025.
Some employers allow carrying over some unused amount to the following year. The maximum amount that can be carried over to the following year is set to 20% of the contribution limit in the current tax year. As a result, the carryover limit is $640 per person in 2024. It will go up to $660 in 2025.
2024 2025 HSA Contribution Limit
You need to have a High Deductible Health Plan with no other coverage to contribute to a Health Savings Account (HSA). Not all high-deductible health insurance is HSA-eligible. Medicare or your spouse having a general-purpose healthcare FSA counts as having other coverage, which makes you ineligible to contribute to an HSA.
You don’t need taxable compensation (“earned income”) to contribute to an HSA.
The HSA contribution limit for single coverage is $4,150 in 2024. The HSA contribution limit for family coverage is $8,300 in 2024. These limits will go up to $4,300 for single coverage and $8,550 for family coverage in 2025. The new limits were announced previously in the spring. Please see HSA Contribution Limits.
Those who are 55 or older by December 31 can contribute an additional $1,000. If you are married and both of you are 55 or older by December 31, each of you can contribute the additional $1,000 but they must go into separate HSAs in each person’s name.
2024 2025 Saver’s Credit Income Limit
The income limits for receiving a Retirement Savings Contributions Credit (“Saver’s Credit”) in 2024 for married filing jointly are $46,000 (50% credit), $50,000 (20% credit), and $76,500 (10% credit). These limits in 2025 will go up to $47,500 (50% credit), $51,000 (20% credit), and $79,000 (10% credit).
The limits for singles are half of the limits for married filing jointly. The 2024 limits are $23,000 (50% credit), $25,000 (20% credit), and $38,250 (10% credit). The 2025 limits will be $23,750 (50% credit), $25,500 (20% credit), and $39,500 (10% credit)
All Together
| 2024 | 2025 | Increase | |
|---|---|---|---|
| 401k, 403b, or 457 plan employee contributions limit | $23,000 | $23,500 | $500 |
| 401k, 403b, or 457 plan ages 50-59 and 64+ catch-up contributions limit | $7,500 | $7,500 | None |
| 401k, 403b, or 457 plan ages 60-63 catch-up contributions limit | $7,500 | $11,250 | $3,750 |
| SIMPLE plan contributions limit | $16,000 | $16,500 | $500 |
| SIMPLE plan contributions limit at eligible employers | $17,600 | $17,600 | None |
| SIMPLE plan ages 50-59 and 64+ catch-up contributions limit | $3,500 | $3,500 | None |
| SIMPLE plan ages 50-59 and 64+ catch-up contributions limit at eligible employers | $3,850 | $3,850 | None |
| SIMPLE plan ages 60-63 catch-up contributions limit | $3,500 | $5,250 | $1,750 |
| Maximum annual additions to all defined contribution plans by the same employer | $69,000 | $70,000 | $1,000 |
| SEP-IRA contributions limit | $69,000 | $70,000 | $1,000 |
| Highly Compensated Employee definition | $155,000 | $160,000 | $5,000 |
| Annual Compensation Limit | $345,000 | $350,000 | $5,000 |
| Traditional and Roth IRA contribution limit | $7,000 | $7,000 | None |
| Traditional and Roth IRA age 50+ catch-up contribution limit | $1,000 | $1,000 | None |
| Deductible IRA income limit, single, active participant in workplace retirement plan | $77,000 – $87,000 | $79,000 – $89,000 | $2,000 |
| Deductible IRA income limit, married, active participant in workplace retirement plan | $123,000 – $143,000 | $126,000 – $146,000 | $3,000 |
| Deductible IRA income limit, married, spouse is active participant in workplace retirement plan | $230,000 – $240,000 | $236,000 – $246,000 | $6,000 |
| Roth IRA income limit, single | $146,000 – $161,000 | $150,000 – $165,000 | $4,000 |
| Roth IRA income limit, married filing jointly | $230,000 – $240,000 | $236,000 – $246,000 | $6,000 |
| Qualified Charitable Distributions (QCD) limit | $105,000 | $108,000 | $3,000 |
| Healthcare FSA Contribution Limit | $3,200 | $3,300 | $100 |
| HSA Contribution Limit, single coverage | $4,150 | $4,300 | $150 |
| HSA Contribution Limit, family coverage | $8,300 | $8,550 | $250 |
| HSA, age 55 catch-up | $1,000 | $1,000 | None |
| Saver’s Credit income limit, married filing jointly | $46,000 (50%) $50,000 (20%) $76,500 (10%) | $47,500 (50%) $51,000 (20%) $79,000 (10%) | $1,500 (50%) $1,000 (20%) $2,500 (10%) |
| Saver’s Credit income limit, single | $23,000 (50%) $25,000 (20%) $38,250 (10%) | $23,750 (50%) $25,500 (20%) $39,500 (10%) | $750 (50%) $500 (20%) $1,250 (10%) |
Source: IRS Notice 2023-75, Notice 2024-80.
2024 2025 Tax Brackets and Standard Deduction
I also calculated the 2025 income tax brackets, standard deduction, capital gains tax brackets, gift tax exclusion limit, and the QCD limit. Please read 2025 Tax Brackets, Standard Deduction, Capital Gains, etc.
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Ron Hansen says
If I contribute $25,000 to a 403B (I’m 60) and $6000 to a Traditional IRA, can those both be deducted from my total income on my taxes.
Harry Sit says
If you contribute to a pre-tax Traditional 403b (not Roth), the amount is already taken off on your W-2. You don’t deduct it again on your tax return. Whether your contribution to a Traditional IRA is deductible depends on your income and filing status. See under the heading “Deductible IRA Income Limit.”
Joey D says
Hmmm…I am tracking inflation as well (in order to predict 401k and catch-up contribution limits), and by my calculations it’s a bit too close to call at this point with three more months of inflation figures to go. However, if I were to guess I would say that for 2020 the 401k limit will increase $500 to $19,500 and the catch-up limit will also increase $500 (to $6,500).
Harry Sit says
It is close. The switch to Chained CPI and the revisions to Chained CPI also add some uncertainties. We will see how it goes as each new release comes out.
Joey D says
Interesting, I was not under the impression that that the 401k limits switched to Chained CPI. (My calcs still use the standard CPI). If they are now using Chained CPI like the tax brackets, that would certainly explain the difference in calculations!
Harry Sit says
I thought when they switched to Chained CPI they switched everything. That explains why Mercer only mentioned CPI-U, not Chained CPI. I will re-calculate and update again shortly.
Joey D says
To be clear…I’m not sure if current law the 401(k) limits should use Chained CPI or not. I’m not finding any definitive guidance on this. For 401k….The pre-Trump tax law used the average of Q3 CPI-U with 2006 as a base year. The 2006 Q3 CPI-U=196.867. Contribution limit was $15,000 and and catch-up was $5,000 as the baseline in 2006.
Using that basis, and using CPI-U, I would agree with Mercer and project $19,500 for 401k employee contribution and $6500 catch-up. Not by much though.
However, if Chained CPI-U is used then we are probably not going to be seeing increases (as you estimate). But I’m not sure what the basis would be (full year average C-CPI-U from 2016? 2018? 3Q average only?)
Clear as mud!
Joe says
For some reason I’d never realized before now that the fact that, although the full benefit of contributing to a Traditional IRA phases out at a relatively low income compared to a Roth IRA, this seems to go against prevailing wisdom in terms of which type of retirement account to contribute to. Most advisers say people should use Roth IRAs when their income is lower, because they assume that they will get into higher tax brackets later in life and then supposedly get more benefit from Traditional IRAs. But the tax laws seems to suggest that the incentives are actually to do the opposite?
KD says
Harry, Here is the relevant information I found on whether to use CPI-U or chained CPI.
https://www.hooklawcenter.com/taxcuts2017/
Quote, “New measure of inflation:
For tax years beginning after Dec. 31, 2017 (Dec. 31, 2018 for figures that are newly provided under the TCJA for 2018 and thus will not be reset until after that year), dollar amounts that were previously indexed using CPI-U will instead be indexed using chained CPI-U (C-CPI-U).
C-CPI-U grows at a slower pace than CPI-U because it takes into account a consumer’s ability to substitute between goods in response to changes in relative prices.
The amounts that apply to retirement plans that are annually adjusted using Social Security methodology under IRS regulations are not affected by these changes. Unless the regulations are reissued and amended to mandate the use of C-CPI-U or the Social Security methodology is changed to mandate such use, these amounts will continue to be annually adjusted using CPI-U.”
Harry Sit says
Thank you KD. I looked up the text of TCJA (aka Trump tax law). It amended the Internal Revenue Code, which affected the calculations for IRAs, HSA, FSA, and the tax brackets. The calculations for the workplace plans (401k/403b/457, SIMPLE, HCE, annual additions, etc.) go by the method in the Social Security Act, which TCJA didn’t change.
Thank you Joey for prompting me to look into this.
Art says
Offical numbers are in
https://www.irs.gov/pub/irs-drop/n-19-59.pdf
Harry Sit says
Another year of 100% accuracy several months ahead!
Russ says
Hi,
why does this page say the IRA limit for 2020 is $6,500?
https://www.irs.gov/retirement-plans/traditional-and-roth-iras
Harry Sit says
That’s wrong but I didn’t see an obvious way to report the error to the IRS. In its news release on November 6, 2019, the IRS clearly said the IRA contribution limit for 2020 will not change from 2019.
“The limit on annual contributions to an IRA remains unchanged at $6,000. The additional catch-up contribution limit for individuals aged 50 and over is not subject to an annual cost-of-living adjustment and remains $1,000.”
https://www.irs.gov/newsroom/401k-contribution-limit-increases-to-19500-for-2020-catch-up-limit-rises-to-6500
Stephen says
How do after tax contributions into a 401K count? For example:
Fulltime Job 401K
Employee After Tax 30K
Employee Pre Tax 0
Employer 5K
Individual 401K
Employee After Tax 0
Employee Pre Tax 19K
Employer 30K
Does this break the max for an employee across all retirement accounts?
Harry Sit says
Non-Roth after-tax contributions count in the per-employer annual additions limit. They don’t count in the per-employee across-all-plans elective deferral limit. Your example does not break the max.
Thrifty Femme says
Any update for 2021?
Harry Sit says
Before the inflation rebound last month, there was a meaningful chance of a decrease in the limits. See Can 401k and IRA Contribution Limits Go Down If We Have Deflation? Now, although the chance of a decrease is more remote, the chance of an increase in the contribution limits is still slim to none.
The income limits for making deductible IRA and Roth IRA contributions may increase by $1,000 here and there. The annual additions limit ($57,000 in 2020) may go up by $1,000 to $58,000 in 2021.
Art says
From what I saw, no increase supposedly.
Harry will probably provide his detailed analysis too.
Thrifty Femme says
Thanks for the response, and yikes on the possibility of a decrease for 401k and IRA limits! Will the HCE stay the same, and can it decease like 401k limits?
Harry Sit says
The HCE limit also can decrease if we have bad enough deflation, but it probably won’t in 2021. No chance of an increase though.
Fred says
Health Savings Account Contribution Limit
…Those who are 55 or older can contribute additional $1,000. If you are married and both of you are 55 or older, each of you can contribute the additional $1,000, but to separate HSAs in each person’s name.
My wife & I have 2 separate HSA accounts but on we’re on the same (one) insurance policy , can we each do the extra $1,000? Thank you .
Henry says
HSA accounts operate similar to IRA accounts which are registered to one person only. Contributions made to each HSA are separate based on each SSN that is reported. As long as both of you are 55 or over, you both can contribute the additional $1000 to each HSA.
Dan says
Harry was right yet again.
The official numbers were just posted:
https://www.irs.gov/pub/irs-drop/n-20-79.pdf
Fred says
Thank you .
On 10.13.2020 Harry wrote: “HSA accounts operate similar to IRA accounts which are registered to one person only. Contributions made to each HSA are separate based on each SSN that is reported. As long as both of you are 55 or over, you both can contribute the additional $1000 to each HSA.”
So in my case for 2020 I am able to contribute $8,100 in one account (7100+1000) and $1,000 in the other account for a total of $9,100. That $9,100 need not be even between the two HSA accounts, right? It is ok to do $8,100 in one account and $1,000 in the other account, i.e. that $9,100 total need not be $4,550 per account , right? So long as the 1 account doesn’t exceed $8,100, it can be any combination between the 2 accounts ,right? Thank you
Harry Sit says
That’s correct. It doesn’t have to be even.
Jeff Likes says
The defined contribution limit for 2020 was $57,000. Assuming I was able to max out my 401(k) contributions and my very generous employer maxed out my defined contribution plan (the sum of them equaled $57,000), could I still contribute to a non-deductible IRA?
Harry Sit says
The IRA contribution limit and the 401k/403b/TSP or SIMPLE limits are separate.
Js says
With all this talk of inflation, too soon to get 2022 adjustments?
Harry Sit says
If the inflation indexes freeze at the current numbers, the 401k limit will increase to $20,000 in 2022 and the IRA limit will stay the same.
Js says
Thanks for all the work you do. This is my first stop to get estimated future year updates.
Thrifty Femme says
How would HCE be impacted if the inflation indices freeze at current numbers?
Harry Sit says
With the latest data released this morning, if we have zero inflation in the next several months, the HCE compensation limit will go up to $135,000. The 401k limit will go up to $20,000 in 2022 and the IRA limit will stay the same at $6,000. With some positive inflation, the 401k limit has a chance to go up to $20,500 in 2022.
MW says
Nice inflation print this morning. Highest core CPI print (3.8%) since 1992. How much more inflation do we need to get to IRA limits to 6,500?
Harry Sit says
It’s not going to happen. Inflation in the upcoming months has to be well above 10% annualized for the IRA limit to go up to $6,500. The 401k limit has a good chance to go up to $20,500 though.
Nann says
Does the Maximum annual additions limit have a chance to go up again this year? I understand the step is $1,000 so it may be a little to steep to increase two years in a row?
Harry Sit says
With strong inflation in recent months, the annual additions limit is most likely going up from $58,000 in 2021 to $61,000 in 2022.
Nann says
$61,000?! Wow, if that’s not a typo, I wasn’t expecting *that*. Next week is going to be interesting… Thanks for your response.
Arthur V says
2022 projections for 401k limit to be posted next week?
Thanks Harry!
Harry Sit says
I’ll update on Wednesday when the inflation numbers for July come out. Because inflation numbers in recent months have been more unpredictable, the projections for 2022 may not be as accurate as in previous years.
Ashley says
How confident are you about the 401k limit? My calculations are showing that it would take just over .8% per month for August and September to bump it up to $21k. Normally I’d say that’s not going to happen, but the average for April-June of this year was .85% per month?
Harry Sit says
No doubt higher inflation numbers for August and September can push the limits even higher. The 401k catch-up limit is also very close to $7,000. I’m reasonably confident of my projections. Getting the August number in another month will help.
Ashley says
You were right. Unless there is unprecedented inflation in September, I don’t see it being quite enough to push it to $21k.
Brian says
Married filing jointly, we are over the Roth IRA income limit so don’t contribute to Roth IRA.
Is contributing to employer sponsored Roth 401k allowed or restricted by income limit as well?
Thanks.
Nann says
You can always do a “backdoor Roth IRA”.
Harry Sit says
No income limit in an employer sponsored plan.
Emmanuel says
Interesting how you’re able to make projections of future events based on obtainable (past) data, one of the benefits of living in a stable country. For some of us, we come from countries where macroeconomic variables are mostly controlled (even though they might say otherwise) and so it might be laughable to make some such projections.
Anyways, about your projections, I think that in the long run, your government will benefit more from relaxing the restriction on tax-advantaged retirement plans.
Nice post!
Art says
Are August inflation numbers out yet?
We still at 21,500 for 2022 401k limit?
Thanks
JoeyD says
August numbers don’t come out until Tuesday the 14th. That being said, it is virtually guaranteed that the 401k limit in 2022 will be 20,500, and the catch-up (age 50+) contribution will remain at $6,500. (At least…that’s by my own calculations…)
JoeyD says
In short: my predictions line up mostly with Harry’s. One place where it differs, however, is in the Traditional and IRA contribution limits. I am currently projecting that the standard and Roth IRA contribution limits will increase by $500 to $6,500.
Harry Sit says
August inflation numbers came out today. All IRA-related numbers for 2022 are final. No changes from the previous projections.
Joey D says
Yup…looks like I need to tweak my calculations for the standard and Roth IRA contribution limits.
Jon says
Harry…you provide excellent data…always have. The all but certain ban of the Mega Backdoor Roth will definitely
make much of the after tax contributions ( up to $66k for those of us over 50 ) null & void. All because Pay Pal founder Peter Thiel made a killing on his Roth 😉 ?!
Harry Sit says
This recent development is discussed in What If Congress Bans Backdoor Roth and Mega Backdoor Roth? Limiting Roth conversion to only pre-tax money was first proposed in 2015. Now that they’re trying to fix the [unrelated] Peter Thiel problem, they’re also fixing a “known issue” at the same time.
Steve says
What about the annual carry-over amount for FSA’s? My understanding is that this amount is also inflation-adjusted.
Harry Sit says
Added. The Healthcare FSA carryover amount will go up by $20 in 2022.
Deep says
Looks like the 2022 limit for FSA is still $2750, not the projected $2850.
Harry Sit says
The 2022 Healthcare FSA limit is $2,850 as projected. See IRS Rev. Proc. 2021-45 released this morning.
KRoberts says
Can you help me with an issue I can’t find the answer to? I’m self-employed and buy my New York state plan off the exchange. The minimum deductible to make a HSA contribution is $1400. This year, the deductible on my plan was $1300, so I can’t contribute. I thought I’d search for a new plan this year, one that is HSA compatible, and I notice that most all the plans now are $1300, just one hundred bucks under the limit. I don’t understand this AT ALL. Is there a work around? Why would the health insurance companies deliberately undercut my ability to contribute to an HSA?
KRoberts says
sorry, found the answer elsewhere on your blog.
Jennie says
“The total employer plus employee contributions to all defined contribution plans by the SAME employer will increase … to $61,000 […] If you work for multiple employers in the same year, you have separate limits for EACH unrelated employer.”
Does that mean an employee could make $61,000 in after tax contributions PER employer, assuming that no other contributions are made by the employee and employer?
Anonymous says
Yes you can – and that’s exactly what I did this year due to a job change mid year.
Anonymous says
Any preliminary projections for the 2023 numbers?
Harry Sit says
HSA will be $3,850/$7,750. IRA will be $6,500 + $1,000. 401k will be $22,000 + $7,000 or $22,500 + $7,500 depending on how high inflation goes in the coming months.
Thrifty Femme says
Is the HCE limit trending towards increasing?
Harry Sit says
The HCE limit will go up to $145,000 or $150,000 in 2023.
MW says
9.1% CPI print this morning. Updated 401k limits projections?
Harry Sit says
I updated everything for 2023.
JB says
Hi Harry. Are you willing to share your most recent 2023 calculations for the Elective Deferral limits (using regular CPI) and IRA limits (using Chained CPI)? Or would you prefer to keep that behind-the-scenes? Thanks for everything you do one this topic, and so many others!
Harry Sit says
I updated everything for 2023 this morning. Just scroll up to the top to see them.
JB says
Sorry I wasn’t more clear in my original comment/ask. Would you be willing to share the specific details/value used in your calculations? As opposed to just the results/conclusions. Thanks for considering.
Harry Sit says
Joey D in reply to comment #53 showed the method. Estimate the CPI-U for July – September. Take an average. Compare with 196.87 and $15,000+$5,000 in 2006. Round down to the nearest $500. The IRA limits are more complicated because there was a switch from regular CPI-U to chained CPI-U.
August West says
I don’t understand what they are doing in the new law (still in the Senate, I think?) with regard to over-50 catch up contributions to 403b. I think I read that the catch up part has to go to a Roth (Roth 403b?) ???
Harry Sit says
It’s still in the sausage making process. I’ll wait until it’s finalized.
Don says
Great site! It’s helped me a lot with planning. The only thing I would add is the the 401k/403b etc. catch up rule is for people that turn 50 in a given calendar year, not that they are over 50. My birthday is in November so this makes a big difference for me 🙂
MEG says
Super helpful! Any thoughts on how AMT will be changed or does that generally remain static?
Hershy says
Is the up to 100% of Earned Income Cap on Roth IRA & solo 401k’s combined or separate?
For example if someone has earned Income of $20,000 in 2022 can he make a $20,000 401K contribution plus a $6000 Roth IRA contribution,
Or just $20,000 between his Roth Ira & 401k combined?
Harry Sit says
Combined if the solo 401k contribution is made as a traditional pre-tax contribution. Separate if it’s made as a Roth solo 401k contribution. Not all solo 401k plans support Roth 401k contributions though.
JP_AZ says
So if one is over 50, do all amounts (for 2023) add up to $73,500? In other words $66,000 + $7,500?
Harry Sit says
Not always. The $7,500 catch-up contribution is contingent on your maxing out the $22,500 employee pre-tax or Roth contribution. If you only contribute say $20,000, the employer can’t contribute $53,500; they can only contribute $46,000. If you only make non-Roth after-tax contributions, you can’t contribute the $7,500 catch-up. If you do max out the $22,500 employee pre-tax or Roth contribution, and you contribute the $7,500 catch-up, and your employer and/or your non-Roth after-tax contributions add up to $43,500, then the grand total will be $73,500.
JP_AZ says
My plan is to contribute:
o Pre-Tax 410K $22,500
o Pre-Tax 401K catch-up $7,500
o After Tax 401k Maximum I am allowed by IRS depending on what Max for all accounts can be ( with in-plan auto conversion to Roth)
o I estimate my Employer match will be $10,000
Zoie says
The 2022 Health Care FSA carryover limit is $570. For 2023, it is $610. Which is the maximum carryover amount for PY2022 going into PY2023?
Harry Sit says
$570. It’s the amount one can carry over to the following year.
Tor Benson says
It looks like the Saver credit for MFJ 10% credit ended up being $500 more at $73,000 (not $72,500) and the single ended up being $36,750 (not $36,250). Thanks for all the great info
Tor Benson says
https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-savings-contributions-savers-credit
Harry Sit says
Thank you for the catch. I updated MFJ to $73,000. The $36,750 number on that IRS page isn’t correct. It should be $36,500, half of the number for MFJ.
Larry Mittal says
Please change the URL, I plan to use this every year
anon says
Any preliminary projections for the 2024 numbers?
Harry Sit says
Let’s wait until next week when the government releases the inflation numbers for May.
Art says
Hi Harry,
Any projections now that numbers are out?
Thanks!
Harry Sit says
Already updated with preliminary projections for 2024. Please scroll up to the top.
Lucille says
Why did 401k and IRA both get a $500 increase, even though 401k’s base amount is 3x as high?
Harry Sit says
Because they adjust for changes in different months. It evens out over time but it can vary from year to year. Rounding plays a role as well.
Lucille says
Does the IRA vs 401k use different inflation numbers?
2021 -> 2022, increase of 1k in the 401k.
2022 -> 2023, increase of 2k in the 401k.
The fact that the 401k somehow increases less than in 2021 when inflation was way lower is strange. But if the IRA goes from 6.5k to 7k, even with rounding I don’t see how mathematically the 401k amount can only go from 22.5k to 23k. Considering that the base amount is more than 3x higher (6.5k vs 22.5k), I would expect the 401k to go up by at least 1k.
I’m not saying you are wrong, just trying to understand how it is possible.
Harry Sit says
They do use different inflation numbers and in different months too. Inflation wasn’t low in 2021, which determined the increase 2021 -> 2022. Pick a random month in the summer of 2021 and compare it with the same month in 2020. Inflation was above 5% then. It’s 4% now.
The numbers also round down to the nearest $500. If the IRA number was $6,900 and it goes up to $7,100, a $200 increase turns into a $500 increase after rounding. Meanwhile if the 401k number was $22,550 and it goes up to $23,450, a $900 increase also turns into a $500 increase after rounding. You just can’t compare the change based on the numbers post-rounding.
Dippy says
I heard a financial planner on the radio state that the Secure Act 2.0 401k threshold for over 50, and over an income of 145k forced Roth bucket contributions may be delayed, thoughts?
Harry Sit says
Some groups requested a delay. The IRS hasn’t said anything.