On November 1, 2023, the IRS announced in Notice 2023-75 cost-of-living adjustments to the tax-qualified retirement plan dollar limits for 2024. Most of the applicable dollar limits currently effective for 2023 will increase moderately compared with the prior year. Below is a summary of the limits that are generally relevant for most retirement plans.

Effective January 1, 2024:

• The elective deferral limit for 401(k), 403(b), and eligible 457(b) plans is increased from $22,500 to $23,000.
• The catch-up contribution limit for those aged 50 or older will remain at $7,500.
• The dollar limit on the annual benefit under a defined benefit plan is increased from $265,000 to $275,000.
• The dollar limit on annual allocations under a defined contribution plan is increased from $66,000 to $69,000.
• The annual compensation limit is increased from $330,000 to $345,000.
• The annual compensation limit for eligible participants in certain governmental plans that, as of July 1, 1993, allowed for the cost-of-living adjustments to the annual compensation limit in effect at that time is increased from $490,000 to $505,000.
• The dollar threshold for “highly compensated employee” status used in performing various nondiscrimination tests is increased from $150,000 to $155,000.
• The dollar threshold for “key employee” status for officers used in performing the “top-heavy” test is increased from $215,000 to $220,000.

The Social Security Administration recently announced the Social Security Wage Base for 2024 will increase from $160,200 to $168,600.

If you have questions, please reach out to your contact in the Hanson Bridgett Employee Benefits Group.