BizTech Law Blog

IRS Announces 2024 Cost-of-Living Adjustments for Retirement Plans and for Health and Welfare Benefit Plans

This blog has been updated since November 8, 2022. The data below is current.

The IRS has announced the 2024 cost-of-living adjustments for retirement plan and health and welfare benefit plan limitations. The charts below set forth the applicable limitations.

Retirement Plans

Similar to previous years, the IRS has again increased the limits for several retirement plan limits for 2024. The rows below represent some of the important changes.

Retirement Plan Limitation	2023 Limit	2024 Limits
401(k) and 403(b) Employee Contribution Limit	$22,500	$23,000
"Catch-Up Contribution" Limit (age 50 and older)	$7,500	$7,500
Defined Contribution Maximum Contribution	$66,000 (plus “Catch-Up”)	$69,000 (plus “Catch-Up”)
Defined Benefit Annual Benefit Limit	$265,000	$275,000
Highly Compensated Employee Compensation	$150,000	$155,000
Top-Heavy Key Employee Officer Dollar Limit	$215,000	$220,000
Annual Compensation Limit	$330,000	$345,000
457(b) Plan Contribution Limit	$22,500	$23,000
Social Security Taxable Wage Base	$160,200	$168,600

A complete explanation of all changes can be found in Notice 2023-75.

Health and Welfare Benefit Plans

The changes in limitations that apply to health and welfare plans are steeper for 2024 than they were in 2023. Notably, the limits for amounts that may be set aside for a Health Savings Account has been increased by 7% for a family and 8% for an individual. The following chart outlines the changes to these limits, but a full explanation can be found in Notice 2023-23 and Notice 2023-34.

Health and Welfare Benefit Plan Limitation	2023 Limit	2024 Limit
Health Flexible Spending Account (FSA) Contribution Limit	$3,050	$3,200
Health Savings Account (HSA) Contribution Limits -    Family -    Single -    Catch-Up Limit (age 55 and older)	$7,750 $3,850 $1,000	$8,300 $4,150 $1,000
HSA Annual Deduction Minimums -    Family -    Single	$3,000 $1,500	$3,200 $1,600
HSA Out-of-Pocket Maximums -    Family -    Single	$15,000 $7,500	$16,100 $8,050
Qualified Transportation Fringe Benefit Monthly Limits -    Qualified Parking -    Transit Pass/Vanpooling	$300 $300	$315 $315

The dependent care assistance limit is currently $5,000 and has remained unchanged for a number of years.

If you have question related to these limits or how they affect the administration of your plan, please contact one of the authors of this article.

• Amanda Dernovshek…517.371.8259…adernovshek@fosterswift.com
• Julie Hamlet…616.796.2515…jhamlet@fosterswift.com
• Mindi Johnson…616.726.2252…mjohnson@fosterswift.com

Categories: Employee Benefits, Retirement