IRS announces 2024 retirement and benefit plan limits, SSA announces COLA adjustment
On November 1, 2023, the Internal Revenue Service (IRS) announced cost-of-living adjustments to the dollar limits on benefits and contributions in retirement plans for 2024. These adjustments are in addition to previously announced increases in limits to other employee benefit plans. In addition, the Social Security Administration recently announced the cost-of-living adjustment to the Social Security wage base for 2024.
The updated limits for 2024, as compared to last year’s limits, are set forth in the charts below.
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Qualified retirement plan contribution limits |
2023 |
2024 |
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$22,500 |
$23,000 |
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$7,500 |
$7,500 |
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$66,000 |
$69,000 |
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$22,500 |
$23,000 |
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$330,000 |
$345,000 |
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Other limits |
2023 |
2024 |
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(Code Section: 414(q)(1)(B)) |
$150,000 |
$155,000 |
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(Code Section: 416(i)(1)(A)(i)) |
$215,000 |
$220,000 |
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(Code Section: 415(b)(1)(A)) |
$265,000 |
$275,000 |
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| SIMPLE plans |
2023 |
2024 |
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$15,500 |
$16,000 |
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$3,500 |
$3,500 |
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The Social Security Administration announced the cost-of-living adjustment to the Social Security contribution and benefit base (also known as the taxable wage base) for 2023.
|
Social Security taxable wage base |
2023 |
2024 |
|
Social Security taxable wage base |
|
$168,600 |
Note: Federal Insurance Contributions Act (FICA) tax rates remain unchanged. The Old-Age, Survivors, and Disability Insurance (OASDI) tax of 6.20 percent each for employers and employees (12.4 percent for self-employed individuals) applies to wages up to the Social Security annual taxable wage base. The Medicare tax of 1.45 percent each for employers and employees is not limited to the taxable wage base and applies to all wages. An additional Medicare tax of 0.9 percent for employees only applies to all wages over specified income thresholds based on filing status ($250,000 for married filing jointly, $125,000 for married filing separately, and $200,000 for all other taxpayers).
The health savings account (HSA) and HDHP limits are as follows:
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HSA/HDHP limits |
2023 |
2024 |
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HSA maximum health savings account contribution |
Family: $7,750 |
Self: $4,150 Family: $8,300 |
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HSA catch-up contribution (for participants aged 55 or older) |
$1,000 |
$1,000 |
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HDHP minimum annual deductible |
Family: $3,000 |
Self: $1,600 Family: $3,200 |
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HDHP maximum out of pocket |
Self: $7,500 Family: $15,000 |
Self: $8,050 Family: $16,100 |
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The flexible spending account limits are as follows:
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Flexible spending account limits |
2023 |
2024 |
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Health FSA |
Max. carryover to following plan year: $610 |
$3,200 Max. carryover to following plan year: $640 |
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Dependent care FSA |
Married, filing separately: $2,500 |
Family: $5,000** Married, filing separately: $2,500 |
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| **Married and filing a joint return or single parent filing | ||||||
Expected benefit health reimbursement arrangement (EBHRA)
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Arrangements |
2023 |
2024 |
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EBHRAs |
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$2,100 |
Transit and parking fringe benefits limit
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Transit and parking fringe benefits limit |
2023 |
2024 |
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Transit/parking |
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$315/month |
Action items for employers
Employers are encouraged to:
- Update any plan documents that identify the annual limitations
- Update participant communications as the limits may impact important benefit elections for 2024
- Update Human Resource Information Systems (HRIS) and/or payroll systems with new limitations for administration, recordkeeping and tax reporting
- Ensure all vendor data feeds are updated to comply with the new limits
For more information, please contact any of the members of our Employee Benefits and Executive Compensation group.
