- The Internal Revenue Service (IRS) raised the amount you can contribute to 401(k) retirement plans by $500.
- The agency also raised the limits on contributions to Individual Retirement Accounts (IRAs) by $500.
- This adjustment reflects the cost of living, which has tamed over the past year, resulting in a smaller increase to the limits.
- Because of the limit increases, you can stash more money away into your retirement accounts.
Here’s an upside to inflation: You can contribute more to your retirement plan.
The IRS raised the contribution limit on employer-sponsored 401(k) retirement plans in 2024 to $23,000 from $22,500, and boosted contribution limits to Individual Retirement Accounts (IRAs) to $7,000 from $6,500. Some limits, including for catch-up contributions for workers over 50, and the federal government’s Thrift Savings Plan, remained unchanged.
Retirement plan contribution limits are among several values that the agency, by law, has to adjust every year to account for changes in the cost of living. Inflation is much tamer this year than in 2022, so the boost to contribution limits is much less than the $2,000 401(k) contribution limit increase that retirement savers got last year.
In addition to raising the retirement contribution limits, the agency raised several related limits, such as the income levels determining eligibility for claiming tax deductions on IRA and Roth IRA contributions.