By Holly Fields, CPA, Senior Manager at Blue & Co.
For 2024, the Internal Revenue Service (IRS) increased plan limitations to reflect cost of living adjustments. Below are some of these limits for 2024:
- Elective deferrals to 401(k), 403(b) and most 457 plans increased from $22,500 to $23,000
- The annual compensation limit increased from $330,000 to $345,000
- The definition of highly compensated employee increased from $150,000 to $155,000
- The defined contribution limit increased from $66,000 to $69,000
- The defined benefit limit increased from $265,000 to $275,000
- The limit on salary deferrals to a SIMPLE retirement plan increased from $15,500 to $16,000 (plus $3,500 catch-up contributions for individuals over age 50)
- Annual contributions to an IRA increased from $6,500 to $7,000 (plus $1,000 catch-up contributions for individuals over age 50)
The below limitations remained unchanged from 2023:
- The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b) and most 457 plans remains at $7,500
See all of the updated retirement plan limits on our website at: www.bluebenefitsonline.com/irs-limits
Did You Know?
- Retirement can last for 30 years or more
- You might need up to 80 percent of your current annual income to retire comfortably
- The average monthly benefit paid by the Social Security Administration is approximately $1,700 (per www.ssa.gov)
Retirement plans can provide significant benefits to not-for-profit organizations and their employees. Some of these benefits include:
- Attracting and retention of better employees
- Helping employees save for their future
- Employee contributions can reduce taxable income
- Employee contributions are easy to make through payroll deductions
There are various retirement plans available to offer such benefits. If you would like to find out more about establishing a plan or would like us to help evaluate whether your current plan maximizes benefits for your employees, please contact your local Blue & Co. advisor
