Retirement account contribution limits are adjusted for inflation each year. Inflation has moderated in recent months. Some contribution limits and income limits will go up in 2024.
Before the IRS publishes the official adjustments in late October or early November, I calculate them using the published inflation numbers and going by the same rules the IRS uses as stipulated by law. I’ve maintained a record of 100% accuracy ever since I started doing these calculations.
The IRS Notice 2023-75 confirmed all these.
- 2023 2024 401k/403b/457/TSP Elective Deferral Limit
- 2023 2024 Annual Additions Limit
- 2023 2024 SEP-IRA Contribution Limit
- 2023 2024 Annual Compensation Limit
- 2023 2024 Highly Compensated Employee Threshold
- 2023 2024 SIMPLE 401k and SIMPLE IRA Contribution Limit
- 2023 2024 Traditional and Roth IRA Contribution Limit
- 2023 2024 Deductible IRA Income Limit
- 2023 2024 Roth IRA Income Limit
- 2023 2024 Healthcare FSA Contribution Limit
- 2023 2024 HSA Contribution Limit
- 2023 2024 Saver’s Credit Income Limit
- All Together
- 2024 Tax Brackets and Standard Deduction
2023 2024 401k/403b/457/TSP Elective Deferral Limit
The 401k/403b/457/TSP contribution limit is $22,500 in 2023. It will go up by $500 to $23,000 in 2024.
If you are age 50 or over by December 31, the catch-up contribution limit is $7,500 in 2023. It will stay the same at $7,500 in 2024.
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.
2023 2024 Annual Additions Limit
The total contributions from both the employer and the employee to all defined contribution plans by the same employer is $66,000 in 2023. It will increase to $69,000 in 2024.
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.
2023 2024 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 $66,000 in 2023, and it will increase to $69,000 in 2024.
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.
2023 2024 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 $330,000 in 2023. It will increase to $345,000 in 2024.
2023 2024 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 $150,000 in 2023. It will go up to $155,000 in 2024.
2023 2024 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 $15,500 in 2023. It will go up to $16,000 in 2024.
If you are age 50 or over by December 31, the catch-up contribution limit in a SIMPLE 401k or SIMPLE IRA plan is $3,500 in 2023. It will stay the same at $3,500 in 2024.
Employer contributions to a SIMPLE 401k or SIMPLE IRA plan aren’t included in these limits.
2023 2024 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 $6,500 in 2023. It will go up to $7,000 in 2024.
If you are age 50 or over by December 31, the catch-up limit is $1,000 in 2023. It will stay the same at $1,000 in 2024.
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.
2023 2024 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 2023 is $73,000 for single filers and $116,000 for a married couple filing jointly. The deduction completely phases out when your income goes above $83,000 in 2023 for singles and $136,000 for married filing jointly.
The full-deduction limits will go up in 2024 to $77,000 for single filers and to $123,000 for a married couple filing jointly. The deduction will completely phase out when your income goes above $87,000 in 2024 for singles; and above $143,000 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 $218,000 in 2023. The deduction completely phases out when your joint income goes above $228,000 in 2023.
The full-deduction limit will go up to $230,000 in 2024. The deduction completely phases out when your joint income goes above $240,000 in 2024.
When you exceed the income limit for taking a deduction for contributing to a Traditional IRA, consider contributing to a Roth IRA instead.
2023 2024 Roth IRA Income Limit
The income limit for contributing the maximum to a Roth IRA depends on your filing status. It’s $138,000 for singles and $218,000 for married filing jointly in 2023. These limits will go up to $146,000 for singles and $230,000 for married filing jointly in 2024.
You can’t contribute anything directly to a Roth IRA when your income goes above $153,000 in 2023 for singles and $228,000 in 2023 for married filing jointly. These limits will go up to $161,000 for singles and $240,000 for married filing jointly in 2024.
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.
2023 2024 Healthcare FSA Contribution Limit
The Healthcare FSA contribution limit is $3,050 per person in 2023. It will go up to $3,200 in 2024.
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 $610 per person in 2023. It will go up to $640 in 2024.
2023 2024 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 $3,850 in 2023. The HSA contribution limit for family coverage is $7,750 in 2023. These limits will go up to $4,150 for single coverage and $8,300 for family coverage in 2024. 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.
2023 2024 Saver’s Credit Income Limit
The income limits for receiving a Retirement Savings Contributions Credit (“Saver’s Credit”) in 2023 for married filing jointly are $43,500 (50% credit), $47,500 (20% credit), and $73,000 (10% credit). These limits in 2024 will go up to $46,000 (50% credit), $50,000 (20% credit), and $76,500 (10% credit).
The limits for singles are half of the limits for married filing jointly. The 2023 limits are $21,750 (50% credit), $23,750 (20% credit), and $36,500 (10% credit). The 2024 limits will be $23,000 (50% credit), $25,000 (20% credit), and $38,250 (10% credit)
All Together
2023 | 2024 | Increase | |
---|---|---|---|
Limit on employee contributions to 401k, 403b, or 457 plan | $22,500 | $23,000 | $500 |
Limit on age 50+ catch-up contributions to 401k, 403b, or 457 plan | $7,500 | $7,500 | None |
SIMPLE 401k or SIMPLE IRA contributions limit | $15,500 | $16,000 | $500 |
SIMPLE 401k or SIMPLE IRA age 50+ catch-up contributions limit | $3,500 | $3,500 | None |
Maximum annual additions to all defined contribution plans by the same employer | $66,000 | $69,000 | $3,000 |
SEP-IRA contribution limit | $66,000 | $69,000 | $3,000 |
Highly Compensated Employee definition | $150,000 | $155,000 | $5,000 |
Annual Compensation Limit | $330,000 | $345,000 | $15,000 |
Traditional and Roth IRA contribution limit | $6,500 | $7,000 | $500 |
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 | $73,000 – $83,000 | $77,000 – $87,000 | $4,000 |
Deductible IRA income limit, married, active participant in workplace retirement plan | $116,000 – $136,000 | $123,000 – $143,000 | $7,000 |
Deductible IRA income limit, married, spouse is active participant in workplace retirement plan | $218,000 – $228,000 | $230,000 – $240,000 | $12,000 |
Roth IRA income limit, single | $138,000 – $153,000 | $146,000 – $161,000 | $8,000 |
Roth IRA income limit, married filing jointly | $218,000 – $228,000 | $230,000 – $240,000 | $12,000 |
Healthcare FSA Contribution Limit | $3,050 | $3,200 | $150 |
HSA Contribution Limit, single coverage | $3,850 | $4,150 | $300 |
HSA Contribution Limit, family coverage | $7,750 | $8,300 | $550 |
HSA, age 55 catch-up | $1,000 | $1,000 | None |
Saver’s Credit income limit, married filing jointly | $43,500 (50%) $47,500 (20%) $73,000 (10%) | $46,000 (50%) $50,000 (20%) $76,500 (10%) | $2,500 (50%) $2,500 (20%) $3,500 (10%) |
Saver’s Credit income limit, single | $21,750 (50%) $23,750 (20%) $36,500 (10%) | $23,000 (50%) $25,000 (20%) $38,250 (10%) | $1,250 (50%) $1,250 (20%) $1,750 (10%) |
Source: IRS Notice 2022-55, Notice 2023-75.
2024 Tax Brackets and Standard Deduction
I also have the 2024 income tax brackets, standard deduction, capital gains, and gift tax exclusion limit. Please read 2024 Tax Brackets, Standard Deduction, Capital Gains, etc.
Say No To Management Fees
If you are paying an advisor a percentage of your assets, you are paying 5-10x too much. Learn how to find an independent advisor, pay for advice, and only the advice.
Dippy says
Per WSJ, “High Earners 50 and Up Get Two-Year Reprieve From IRS on 401(k) Rule”. Good news for some taxpayers.
Jason says
Making sure I understand it:
The $22,500 401(k) Pre-tax/Roth limit applies between ALL employers you have during the year, but…
The $66,000 annual additions limit applies to EACH employer you have during the year, so…
You could max out the annual additions limit for each employer by filling it with after-tax contributions and therefore (if eligible) do multiple Mega Backdoor Roths over the span of a year? Example, if under 50:
Employer 1: $12,000 Pre-Tax, $6000 Employer Match, $48,000 After-Tax (convert to Roth)
Employer 2: $12,500 Pre-Tax, $6000 Employer Match, $47,500 After-Tax (convert to Roth)
Is this a correct plan? I realize it’s aggressive, just making sure I understand how it works. Thanks.
Harry Sit says
Your employee pre-tax contributions between two employers add up to $24,500 but it’s going in the right direction in terms of total employee + employer contributions. That’s assuming the two employers aren’t related and both plans allow non-Roth after-tax contributions (to be converted to Roth).
Dan says
Yes – I have done this when switching employers.
Eric says
This site has been a great resource for me to figure out these calculations and thank you to everyone who has posted their comments and questions. I’ve got my tax bracket calculations dead-on and below are the C-CPI-U numbers (prior to being adjusted by the IRS after-the-fact) I’ve used to fine-tune them consolidated from different sources in case others are also trying to do this on their own
2018 baseline: 138.237 (found online)
2022: 149.2708 (found online)
2023: 159.84 (calculated)
2024: 168.475 (used the actual data)
I also calculated out my own coefficients that let me take the overall MFJ tax brackets and break them out into the actual tax tables for MFJ monthly and MFJ biweekly by just noticing the trends through the years if anybody wants those.
I’m still having trouble getting the calculations right for IRA limits. For 401K, I followed the guidance and took the 2023 Jul-Sep CPI-U average (306.033) and compared to 2006 (196.867, $15,000) and it came out correct for this year, I just don’t have enough data to confirm it’s right and will work in future years. For IRAs, neither the C-CPI method or the 401K method give me the correct numbers for this year. Also the tax law mentions a base line from 2007 and I can’t find that data anywhere. I’ve really enjoyed trying to figure this out for myself but finally hit a brick wall. Any guidance on IRA adjustments is greatly appreciated.
Ashley says
The IRA baseline is determined by taking the CPI-U from 2007 and multiplying it by the C-CPI-U from 2016 divided by the CPI-U from 2016. Try using 116.75 as your baseline. The calculation for 2024 limits would be (1 + the average C-CPI-U for Sep 2022 to Aug 2023 (168.75) minus the baseline (116.75) divided by the baseline) multiplied by $5000 then rounded down to the nearest $500. So, (1 + (168.75-116.75)/116.75) = 144.54%. 144.54% * $5000 = $7226.98, rounded down to $7000. Also keep in mind that C-CPI-U data is revised every so often, so the data published at this moment isn’t exactly the same as the data as it was when the limits for 2024 were determined.
Eric says
Thank you! (Website won’t let me respond to your comment directly.) It all makes sense now and working it backwards the changes match to past years. I’m on top of the C-CPI-U adjustments and catch them on the final release every year now. Based on a 2% growth rate estimate, I can forecast IRA limits going up to $7,500 from 2026-2029, $8,000 in 2030-2032, and $8,500 in 2032 pending major tax law changes and C-CPI-U variations.
Ashley says
My models currently have the IRA limit at $7000 for 2025, $7500 for 2026 and 2027, and $8000 for 2028 and 2029. I’m using a trailing 12-month average for the inflation rate though, so I’m less certain the further out it gets given the unusually high rate as of late.