IRS Increases Contribution Limit For Retirement Accounts

401 k with money coming out of eggshells
Via Flickr
Adé Hennis
November 27, 2023

Earlier this month, the IRS released its plans to increase limits for contributions toward retirement accounts, but it isn’t as high as last year’s limit increase.

The contribution limit for 401k plans will increase from $22,500 this year to $23,000 in 2024. This doesn’t include employee contributions for those that have matching programs. The limit for combined contributions from employer and employee next year will be $69,000, up from $66,000 in 2023.

For those 50 or older who participate in catch-up contributions for their 401k, the specific $7,500 limit this year will stay the same, but the combined catch-up contribution limits will increase to $76,500 from the $73,500 this year.

Contribution limit changes are generally determined by the annual cost of living for Americans. Because of inflation, the $500 increase is not as much as the  401k increase for this year. Contribution limits for IRAs (Individual Retirement Accounts) also increased by $500.

Consumers have the opportunity to benefit from the increased contribution limit, and there's potential for an even further increase in the limit next year.