2024 USA 401(k) Contribution Limits: Your Comprehensive Guide
Although the official announcement is set for October, a recent report suggests that after a significant increase in 2023, the Internal Revenue Service (IRS) is likely to only slightly raise contribution limits for retirement accounts in 2024. The 2023 adjustment, influenced by inflation, saw a $2,000 increase. The updated report indicates an expected additional increase of $500 in 2024, bringing the maximum contribution for 401(k), 403(b), and 457 plans to $23,000. The yearly addition limit for defined contribution plans is anticipated to range between $68,000 and $69,000. The catch-up contribution limit for 2024 is expected to remain at $7,500, the same as in 2023.
2024 401(k) Contribution Limits Overview
In the United States, a 401(k) plan is a popular retirement savings account offered by employers. It operates as a tax-deferred pension plan, deriving its name from the corresponding section in the Internal Revenue Service code (401(k)). Typically managed by a company’s human resources department, these plans have been a mainstay since their introduction in 1978 and have become the most widely utilized form of employer-sponsored retirement accounts in the country. The 2020 CARES Act, officially named the Coronavirus Aid, Relief, and Economic Security Act, was enacted in response to the COVID-19 pandemic, providing assistance to those affected by the virus.