Even though it doesn’t feel like it sometimes, contribution limits are indexed to inflation.

Twelve-month inflation for all items ending in September 2023 has been 4.1%, so the 2024 contribution limits increased significantly but less than last year.

As always, we recommend updating your contributions to meet these new maximums.

If you are stretched thin and are thinking, “I can’t afford to save more!” You might appreciate reading our articles “Fund Your Roth IRA Even When You Can’t Afford It” and “How to Convert Taxable Savings Into Your Roth IRA.”

A Roth IRA can actually make a great place to store your emergency fund. Even though it is a retirement account, Roth IRAs have the special provision that you can always withdraw the amount you contributed for any reason and at any age. If you have the free cash, fully funding your Roth IRA is normally the right decision.

Another helpful read might be our Account Funding Priorities series to determine the design of your own savings waterfall plan.

Tax Year 2024
Account Type	Requirements		Contribution Limit	More Reading
Traditional or Roth IRA Contribution (subject to phaseouts, limited by wages)	Age 49 and under		$7,000	Should I Fund a Roth or a Traditional Account? Do Large Roth Conversions Require Backdoor Roth Contributions? Change from 2023: +$500 to the contribution limit Catch-up contribution stays at $1,000
	Age 50 and over		$8,000
Employee Elective Deferral 401(k) or 403(b) plans	Age 49 and under		$23,000	Choosing Between Your Employee Retirement Account Options Is Funding My 401(k) Match Sufficient to Fund My Retirement? Change from 2023: +$500 to the elective deferral Catch-up contribution remains at $7,500
	Age 50 and over		$30,500
Employee Deferred Compensation 457(b) plans	Age 49 and under		$23,000	There also may be special 457(b) catch-up contributions when you are 3 years prior to the plan’s specified retirement age. Change from 2023: +$500 to the elective deferral Catch-up contribution remains at $7,500
	Age 50 and over		$30,500
Employee Elective Deferral SIMPLE 401(k) or IRA Plan (with further limitations)	Age 49 and under		$16,000	Change from 2023: +$500 to the elective deferral Catch-up contribution remains at $3,500
	Age 50 and over		$19,500
SEP IRA Employer Contribution 401(k), 403(b), or 457 plans Employer Contribution	The smaller of:		$69,000 or 25% of compensation	Can I Contribute to Both a SEP and a 401(k)? Individual 401(k) Elective Deferral Limits and Deadlines Service: Retirement Plan Management For 401(k), 403(b), or 457 plans, the total is brought to $75,500 with age 50 catch-up. The SEP IRA does not have a catch-up. Change from 2023: +$3,000 to the limitation for defined contribution plans
Pension-Linked Emergency Savings Account (ESA)	The portion of the account attributable to participant contributions cannot exceed:		$2,500	Contribution limit can be made smaller by the plan sponsor. Only available to non-highly compensated employees
Health Savings Account (HSA) Contribution	Single Plan	Age 54 and under	$4,150	When Should You Stop Funding Your HSA? When Partial-Year HSA Contribution Limits Don’t Apply A Guide to HSA Qualified Medical Expenses, Contributions, and Family Plans with Adult Children Service: Health Savings Account Advice Change from 2023: +$300 to base single contribution limit +$550 to base family contribution limit
		Age 55 and over	$5,150
	Family Plan	Age 54 and under	$8,300
		Age 55 and over	$9,300
	Other Spouse Catch-Up	Age 54 and under	+$0	Both Spouses Can Make The HSA Catch-Up Contribution Catch-up contribution remains at $1,000
		Age 55 and over	+$1,000
Annual Gift Exclusion	Per Donee / Donor Combination		$18,000	Gifts, Taxes, and IRS Form 709 Annual Exclusion From Gift Taxes IRS: Frequently Asked Questions on Gift Taxes Change from 2023: +$1,000 to the annual limit

 

You can find the current contribution limits here: Account Contribution Limits
and the IRS page on the same topic here: Retirement Topics – Contributions

Featured Image by Melissa Walker Horn on Unsplash