American employees can contribute up to $23,000 to their 401(k) plans starting in 2024, up from $22,500 in 2023, the IRS announced Nov. 1.
The contribution limit of $23,000 also applies to 403(b) plans, most 457 plans and the federal government's $804 billion Thrift Savings Plan, Washington, which serves as the retirement plan for federal employees and members of the uniformed services, according to an IRS news release.
The catch-up contribution limit for employees age 50 and over who participate in such plans remains at $7,500, which the IRS set as the new limit in 2023.
Alternatively, the limit on annual contributions to an IRA increased to $7,000 for 2024, up from $6,500 in 2023. The IRA catch-up contribution limit for individuals aged 50 and over remains at $1,000 for 2024. However, under SECURE 2.0, IRA catch-up contributions are now subject to an annual cost-of-living adjustment, according to the IRS.