Retirement Plan Limits to Rise in 2024, Mercer Projects
Almost all retirement plan limits will increase, with the exception of catch-up contributions, according to the benefits consultancy.
From 2023 to 2024, almost every key Internal Revenue Code limit for qualified retirement plans will increase, according to Mercer, a benefits consulting firm owned by Marsh McLennan.
The contribution limits for 401(k), 403(b) and eligible 457 plan elective deferrals and for designated Roth contributions are projected to rise to $23,000 in 2024 from $22,500 in 2023, according to a post last week by Mercer’s law and policy group.
The 415(b) defined benefit plan maximum annuity limit is predicted to increase to $275,000 from $265,000, upping the amount an individual can receive from a tax-qualified DB pension plan.
Mercer estimates the 415(c) defined contribution plan maximum annual addition will grow to $68,000 from $66,000. Given significant inflation in August and September, and the 415(c) limit could reach $69,000, the firm notes.
The 414(q)(1)(B) highly compensated employee and 414(q)(1)(C) top-paid group limit is expected to increase to $155,000 from $150,000. Additionally, Mercer projects the limit of 416(i)(1)(A)(i) officer compensation for top-heavy plan key employees will climb to $220,000 in 2024 from $215,000 in 2023.
Only the limit of 414(v)(2)(B)(i) catch-up contributions, for plans other than SIMPLE plans, is expected to remain the same in 2024, at $7,500.
The predicted 2024 limits reflect increases in the Bureau of Labor Statistics’ Consumer Price Index for All Urban Consumers from the third quarter of 2022 to the third quarter of 2023, according to the consultancy. Mercer’s projections are based on the tax code’s cost-of-living adjustment and rounding methods, the CPI-U through July and estimated CPI-U values for August and September.