{"id":20768,"date":"2023-09-27T22:13:55","date_gmt":"2023-09-27T22:13:55","guid":{"rendered":"https:\/\/www.thinkadvisor.com\/2023\/09\/27\/smaller-401k-ira-contribution-limit-increases-expected-in-2024\/"},"modified":"2023-09-27T22:13:55","modified_gmt":"2023-09-27T22:13:55","slug":"smaller-401k-ira-contribution-limit-increases-expected-in-2024","status":"publish","type":"post","link":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/2023\/09\/27\/smaller-401k-ira-contribution-limit-increases-expected-in-2024\/","title":{"rendered":"Smaller 401(k), IRA Contribution Limit Increases Expected in 2024"},"content":{"rendered":"<div class=\"media_block\"><a href=\"https:\/\/feeds.feedblitz.com\/-\/796405853\/0\/thinkadvisor\/\"><img decoding=\"async\" src=\"https:\/\/images.thinkadvisor.com\/contrib\/content\/uploads\/sites\/415\/2023\/09\/08_Retirement_Roth_RIA_401K_Shutter_640x640.jpg\" class=\"media_thumbnail\"><\/a><\/div>\n<div><img decoding=\"async\" src=\"https:\/\/images.thinkadvisor.com\/contrib\/content\/uploads\/sites\/415\/2023\/09\/08_Retirement_Roth_RIA_401K_Shutter_640x640.jpg\" class=\"ff-og-image-inserted\"><\/div>\n<div class=\"the-advisor bullet-summary\">\n<h3>What You Need to Know<\/h3>\n<ul>\n<li>Each year in mid-October, the IRS publishes its annual inflation adjustments for the next year\u2019s retirement account contribution limits. <\/li>\n<li>Retirement savers enjoyed big increases for 2023, but despite persistent inflation, smaller limit increases are expected for 2024. <\/li>\n<li>With a smaller Social Security COLA also projected for next year, retirement savers are feeling the sting of inflation. <\/li>\n<\/ul>\n<\/div>\n<p id=\"first-para\">Unless a <a href=\"https:\/\/www.thinkadvisor.com\/2023\/09\/25\/new-house-members-may-soon-go-to-government-shutdown-school\/\" target=\"_blank\" rel=\"noopener\">federal government shutdown<\/a> derails the normal course of business, the Internal Revenue Service will announce 2024\u2019s 401(k) plan and individual retirement account contribution limits in less than a month\u2019s time.<\/p>\n<p>Despite the persistence of high inflation, tax experts anticipate that 2024\u2019s increase will fall significantly below the <a href=\"https:\/\/www.thinkadvisor.com\/2022\/10\/21\/irs-announces-401k-contribution-limits-for-2023\/\" target=\"_blank\" rel=\"noopener\">sizable limit hike of $2,000<\/a> enjoyed by retirement savers for 2023. That increase pushed the 2023 contribution limit to $22,500 for 401(k), 4013(b) and 457 plans, although savers over 50 can use catch-up contributions to sock away up to $30,000 this year.<\/p>\n<p>According to projections from <a href=\"https:\/\/www.thinkadvisor.com\/2023\/09\/15\/9-irs-tax-adjustment-predictions-for-2024-retirement-planning\/\" target=\"_blank\" rel=\"noopener\">Bloomberg Tax<\/a> and <a href=\"https:\/\/www.milliman.com\/en\/insight\/2024-irs-limits-forecast-may\" target=\"_blank\" rel=\"noopener\">Milliman<\/a>, the defined contribution plan deferral increase for 2024 is likely to be in the range of $500, or only about one quarter of the 2023 increase.<\/p>\n<p>A similar boost is projected for contributions going to both traditional and Roth individual retirement accounts. These limits only increased from $6,000 to $6,500 for 2023, and&nbsp;a similar hike is projected for 2024.<\/p>\n<p>Should these projections prove accurate, that would imply a 2024 contribution limit of $23,000 for 401(k), 4013(b) and 457 plans. For IRAs, the 2024 limit would be $7,000, with an additional $1,000 of potential catch-up contributions allowed for those over age 50.<\/p>\n<p>According to the projections, for defined contribution plans, the maximum annual addition counting all&nbsp;potential employer and employee contributions will be between $68,000 and $69,000, and the catch-up contribution limit for 2024 is estimated to remain at $7,500, the same level as in 2023.<\/p>\n<h2>Smaller Social Security COLA Also Expected<\/h2>\n<p>Another key data point&nbsp;expected to&nbsp;be released in mid-October is the 2024 Social Security cost-of-living adjustment, or COLA.<\/p>\n<p>According to projections by The Senior Citizens League, the 2024 Social Security COLA is <a href=\"https:\/\/www.thinkadvisor.com\/2023\/09\/13\/social-security-cola-2024-estimate-rises-to-3-2\/\" target=\"_blank\" rel=\"noopener\">likely to be 3.2%<\/a>, based on the latest&nbsp;<a href=\"https:\/\/www.bls.gov\/news.release\/cpi.nr0.htm\" target=\"_blank\" rel=\"noopener\">consumer price index data<\/a> released in mid-September.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>What You Need to Know Each year in mid-October, the IRS publishes its annual inflation adjustments for the next year\u2019s retirement account contribution limits. Retirement savers enjoyed big increases for 2023, but despite persistent&#46;&#46;&#46;<\/p>\n","protected":false},"author":1,"featured_media":20769,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[],"tags":[1],"jetpack_featured_media_url":"https:\/\/blog.lifeinsurance-orleans.ca\/wp-content\/uploads\/2023\/09\/smaller-401k-ira-contribution-limit-increases-expected-in-2024.jpg","_links":{"self":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/20768"}],"collection":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/comments?post=20768"}],"version-history":[{"count":0,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/posts\/20768\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media\/20769"}],"wp:attachment":[{"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/media?parent=20768"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/categories?post=20768"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.lifeinsurance-orleans.ca\/index.php\/wp-json\/wp\/v2\/tags?post=20768"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}