What Are The 401K Limits For 2024?

The 401K limits for 2024 have increased since last year. This is good news, offering individuals more opportunities to save for retirement.

401(k) Contribution Limits for 2024

For employer-sponsored plans, such as 401(k), 403(b), and 457 retirement plans—as well as Thrift Savings Plans (TSPs) for federal employees and military members—the contribution limit for 2024 will rise to $23,000. This represents a $500 increase compared to the 2023 limit. Although this increase is smaller than in previous years, it still offers a chance to enhance retirement savings.

Catch-up contributions, which allow workers aged 50 and older to save extra toward retirement, remain the same for 2024 at $7,500. This means that individuals aged 50 and older can contribute a total of $30,500 to their 401(k), 403(b), 457, or TSP accounts in 2024.

IRA Contribution Limits for 2024

For Individual Retirement Accounts (IRAs)—both Roth and traditional types—the 2024 contribution limit will increase to $7,000, up from $6,500 in 2023. Catch-up contributions for IRAs will hold steady at a maximum of $1,000, allowing individuals aged 50 and older to contribute up to $8,000 to their IRAs in 2024.

Impact of Contribution Limits on Retirement Savings

Increasing contribution limits, even by a small amount, can significantly impact retirement savings over time. For example, an additional $500 contribution per year can grow substantially when invested over several decades, especially when considering the potential for compound interest. Maxing out contributions, if financially feasible, can help ensure a more comfortable retirement.

Comparison to Previous Years

It’s useful to compare the 2024 contribution limit increase with previous years to understand the trend. In 2023, the contribution limits increased by $2,000, a substantial jump compared to the $500 increase for 2024. In 2022, the increase was $1,000. These adjustments reflect the IRS’s efforts to keep pace with inflation and the rising cost of living, ensuring that retirement savings opportunities remain aligned with economic conditions.

Strategies for Maximizing Contributions

To make the most of the higher contribution limits, consider the following strategies:

  1. Automate Contributions: Set up automatic contributions from your paycheck to your retirement account. This ensures consistent savings and reduces the temptation to spend the money elsewhere.
  2. Take Advantage of Employer Matching: Many employers offer matching contributions up to a certain percentage of your salary. Make sure to contribute enough to take full advantage of this benefit, as it effectively provides “free” money for your retirement.
  3. Catch-Up Contributions: If you are 50 or older, make use of the catch-up contribution limits to boost your retirement savings. This can help bridge any gaps in your savings and ensure a more secure retirement.
  4. Review and Adjust Annually: Regularly review your retirement savings strategy and adjust your contributions as needed. Life circumstances, such as changes in income or financial goals, may require you to reassess your savings plan.

Tax Implications

It’s also important to consider the taxable implications of contributions. Contributions to traditional 401(k) plans and IRAs are typically tax-deductible, reducing your taxable income in the year you make the contribution. However, withdrawals in retirement are taxed as ordinary income. Conversely, Roth 401(k) and Roth IRA contributions are made with after-tax dollars, meaning withdrawals in retirement are generally tax-free.

Spousal Coordination and Continued Working

Married couples should coordinate their contributions to maximize tax benefits and savings potential. Additionally, if you plan to continue working while contributing to a retirement account, be aware of the annual earnings limits and how they might affect your Social Security benefits.

Consulting with a Fee-Only Professional

Given the complexities of retirement planning, consulting with a Fee-Only financial adviser can provide personalized guidance tailored to your individual circumstances. These professionals, who do not earn commissions from the products they recommend, can help you navigate contribution limits, tax implications, and investment strategies to ensure your retirement goals are on track.


The increase in 401(k) and IRA contribution limits for 2024 presents an opportunity to enhance retirement savings. By staying informed about these changes and implementing effective savings strategies, you can maximize your contributions and build a more secure financial future. Consulting with a Fee-Only financial adviser can provide valuable insights and ensure that your retirement plan is optimized for success.

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