Discover the Updated 401(k) Contribution Limits for 2024
Planning for retirement is an ongoing process, and knowing the latest changes in 401(k) plan limits is essential for both employers and employees. These limits affect how much individuals can contribute to their retirement plans and the parameters used for various compliance tests. Explore the updated contribution limits for 2024 compared to 2023, and see how these changes might impact your retirement planning.
401(k) Contribution Limits: 2023 vs. 2024
The table below outlines the key differences in 401(k) plan limits between 2023 and 2024, providing a clear overview of the maximum contributions, catch-up contributions, and compensation thresholds for key and highly compensated employees.
| 401(k) Plan Limits | 2023 | 2024 | Change |
|---|---|---|---|
| Maximum Salary Deferral for Workers | $22,500 | $23,000 | +$500 |
| Catch-up Contributions for Workers Age 50 and Older | $7,500 | $7,500 | +$0 |
| Total Contribution Limit | $66,000 | $69,000 | +$3,000 |
| Total Contribution Limit, Plus Catch-up Contribution | $73,500 | $76,500 | +$3,000 |
| Compensation Limit for Figuring Contributions | $330,000 | $345,000 | +$15,000 |
| Compensation Threshold for Key Employee Nondiscrimination Testing | $215,000 | $220,000 | +$5,000 |
| Threshold for Highly Compensated Employee Nondiscrimination Testing | $150,000 | $155,000 | +$5,000 |
These changes highlight the importance of staying up-to-date with 401(k) plan limits to ensure compliance and optimize retirement savings. Whether you're an employee or an employer, understanding these adjustments will help you make better financial decisions throughout the year.
Feel free to use this table to quickly reference the 401(k) plan limits for 2023 and 2024, along with the specific changes in each category. Happy planning!