On November 1st, 2023, The Internal Revenue Service (IRS) announced the new 401(k) plan limits for 2024 in Notice 2023-751 Here are the highlights that employers should be aware of:

401k Plan Limits20242023Difference
Maximum employee elective deferral (for ages 49 and younger)$23,000$22,500+$500
Employee catch-up contributions (for ages 50 and older)$7,500$7,500$0
Maximum employee elective deferral (for ages 50 and older)$30,500$30,000+$500
Maximum employer + employee limit (for ages 49 or younger)$69,000$66,000+$3,000
Maximum employer + employee limit (for ages 50 and older)$76,500$73,500+$3,000
Maximum employee compensation limit$345,000$330,000+$15,000
Highly Compensated Employee Compensation Limitation$155,000$150,000+$5,000

Details on other retirement-related cost-of-living adjustments for 2024 can be found in the IRS Notice 2023-752

Employer Next Steps

As employers prepare for the 2024 plan year, they should ensure any plan materials and participant communications reflect these new limits. Additionally, employers will want to confirm that their 401(k) plan comply with these limits when processing contributions and testing for discrimination issues, where applicable.

  1. 2024 Limitations Adjusted as Provided in Section 415(d), etc https://www.irs.gov/pub/irs-drop/n-23-75.pdf
  2. Id.

Pensionmark Financial Group, LLC (“Pensionmark”) is an investment adviser registered under the Investment Advisers Act of 1940. Pensionmark is affiliated through common ownership with Pensionmark Securities, LLC (member SIPC).

DISCLAIMER: This communication is intended for information purposes only and should not be construed as legal or tax advice. It provides general information and is not intended to encompass all compliance and legal obligations that may be applicable to your situation. This information and any questions as to your specific circumstances should be reviewed with legal counsel and/or a tax professional.  

Jason Aceituno — Jason is the Director, Financial Services at Sequoia. Jason leads the 401(k) Advisory team at Sequoia and is responsible for optimizing the overall client experience. Jason has been in the retirement industry for over 10 years and has been at Sequoia for 5 years, joining as a 401(k) Advisor for the enterprise market. He holds the Accredited Investment Fiduciary (AIF® ) designation. When Jason is not working, he spends most of his time raising his two young daughters and enjoying the Bay Area.