Updated on November 2, 2023 9:40am EDT
IRS raises 401(k), IRA contribution limits for 2024
IRS lifts retirement contribution limits for 2024 amid still-high inflation
By Megan Henney FOXBusiness
The IRS on Wednesday raised the amount that Americans can set aside for retirement in their 401(k) and other tax-deferred plans next year.
Beginning in 2024, workers will be allowed to contribute up to $23,000 to their 401(k), an increase of $500 from this year. The increase applies to other retirement savings accounts, including the 403(b) plan, most 457 plans and the federal government's Thrift Savings Plan.
Catch-up contributions for savers age 50 and older will remain unchanged at $7,500.
The agency also boosted the contribution maximums for IRAs and lifted the limit to $7,000 for 2024, up from $6,500 in 2022. The catch-up contribution amount for IRAs will stay at $1,000.
The IRS makes such cost-of-living adjustments annually, but in times of high inflation, the increases are more significant and impactful for taxpayers.
Just a fraction of people – about 8.5% – who contribute to a retirement account hit the maximum in 2018, according to a recent Congressional Research Service report.
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https://www.foxbusiness.com/economy/irs-raises-401k-ira-contribution-limits-2024