2024 Cost-of-Living Adjustments for Qualified Retirement Plans
A summary of the cost-of-living adjustments for Qualified Retirement Plans (COLA) effective for 2024 are now available and can be reviewed below. These adjustments recently announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have a wide-ranging impact, including the savings rate for retirement plans. In general, annual compensation amounts and limits for elective deferrals were increased, while catch-up contribution limits remain unchanged.
2024 Cost-of-Living Adjustments Compared to 2023 and 2022:
| Code Section | 2024 | 2023 | 2022 |
| 401(a)(17)/404(1) Annual Compensation | $345,000 | $330,000 | $305,000 |
| 402(g)(1) Elective Deferrals | 23,000 | 22,500 | 20,500 |
| 408(k)(2)(C) SEP Minimum Compensation | 750 | 750 | 650 |
| 408(k)(3)(C) SEP Maximum Compensation | 345,000 | 330,000 | 305,000 |
| 408(p)(2)(E) SIMPLE Maximum Contributions | 16,000 | 15,500 | 14,000 |
| 409(0)(1)(C)(ii) ESOP Limits | 1,380,000 275,000 |
1,330,000 265,000 |
1,230,000 245,000 |
| 414(q)(1)(B) HCE Threshold | 155,000 | 150,000 | 135,000 |
| 414(v)(2)(B)(i) Catch-up Contributions | 7,500 | 7,500 | 6,500 |
| 414(v)(2)(B)(ii) Catch-up Contributions | 3,500 | 3,500 | 3,000 |
| 415(b)(1)(A) DB Limits | 275,000 | 265,000 | 245,000 |
| 415(c)(1)(A) DC Limits | 69,000 | 66,000 | 61,000 |
| 416(i)(1)(A)(i) Key Employee | 220,000 | 215,000 | 200,000 |
| 457(e)(15) Deferral Limits | 23,000 | 22,500 | 20,500 |
| 1.61-21(f)(5)(i) Control Employee | 135,000 | 130,000 | 120,000 |
| 1.61-21(f)(5) (ili) Control Employee | 275,000 | 265,000 | 245,000 |
| Taxable Wage Base for Social Security | 168,600 | 160,200 | 147,000 |
The Impact of COLA for 2024
Derived from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) readings for July, August and September, the COLA calculation showed a 2.6% increase in July and a 3.4% rise in August. Why have these numbers increased once more?
In 2022, inflation reached 40-year highs due to a combination of factors, including pandemic stimulus payments, increased consumer spending and widespread supply chain challenges. This prompted the Federal Reserve to implement rapid interest rate hikes, resulting in the current benchmark U.S. interest rate reaching its highest point in more than two decades.
Despite a slight economic slowdown in 2023 compared to the previous year, inflation persists at higher levels than the 2010s. The Senior Citizens League argues, while Social Security benefits increase annually, the rising cost of goods and services essential for retirees is outpacing the growth of these benefits. Furthermore, wages have grown for U.S. workers, yet they have not kept up with inflation costs, and retirees who are no longer receiving a paycheck aren’t reaping the benefits.
As inflation continues to outpace Social Security benefits and wage growth, it’s crucial to understand how these changes affect your financial future. Our team of Trusted Advisors is here to guide you through the implications and provide personalized insights. Don’t let economic shifts catch you off guard—take proactive steps to secure your financial stability.
Contact us today to gain clarity on your unique situation and make informed decisions for a more secure tomorrow.
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2024 Cost-of-Living Adjustments for Qualified Retirement Plans
A summary of the cost-of-living adjustments for Qualified Retirement Plans (COLA) effective for 2024 are now available and can be reviewed below. These adjustments recently announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have a wide-ranging impact, including the savings rate for retirement plans. In general, annual compensation amounts and limits for elective deferrals were increased, while catch-up contribution limits remain unchanged.
2024 Cost-of-Living Adjustments Compared to 2023 and 2022:
| Code Section | 2024 | 2023 | 2022 |
| 401(a)(17)/404(1) Annual Compensation | $345,000 | $330,000 | $305,000 |
| 402(g)(1) Elective Deferrals | 23,000 | 22,500 | 20,500 |
| 408(k)(2)(C) SEP Minimum Compensation | 750 | 750 | 650 |
| 408(k)(3)(C) SEP Maximum Compensation | 345,000 | 330,000 | 305,000 |
| 408(p)(2)(E) SIMPLE Maximum Contributions | 16,000 | 15,500 | 14,000 |
| 409(0)(1)(C)(ii) ESOP Limits | 1,380,000 275,000 |
1,330,000 265,000 |
1,230,000 245,000 |
| 414(q)(1)(B) HCE Threshold | 155,000 | 150,000 | 135,000 |
| 414(v)(2)(B)(i) Catch-up Contributions | 7,500 | 7,500 | 6,500 |
| 414(v)(2)(B)(ii) Catch-up Contributions | 3,500 | 3,500 | 3,000 |
| 415(b)(1)(A) DB Limits | 275,000 | 265,000 | 245,000 |
| 415(c)(1)(A) DC Limits | 69,000 | 66,000 | 61,000 |
| 416(i)(1)(A)(i) Key Employee | 220,000 | 215,000 | 200,000 |
| 457(e)(15) Deferral Limits | 23,000 | 22,500 | 20,500 |
| 1.61-21(f)(5)(i) Control Employee | 135,000 | 130,000 | 120,000 |
| 1.61-21(f)(5) (ili) Control Employee | 275,000 | 265,000 | 245,000 |
| Taxable Wage Base for Social Security | 168,600 | 160,200 | 147,000 |
The Impact of COLA for 2024
Derived from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) readings for July, August and September, the COLA calculation showed a 2.6% increase in July and a 3.4% rise in August. Why have these numbers increased once more?
In 2022, inflation reached 40-year highs due to a combination of factors, including pandemic stimulus payments, increased consumer spending and widespread supply chain challenges. This prompted the Federal Reserve to implement rapid interest rate hikes, resulting in the current benchmark U.S. interest rate reaching its highest point in more than two decades.
Despite a slight economic slowdown in 2023 compared to the previous year, inflation persists at higher levels than the 2010s. The Senior Citizens League argues, while Social Security benefits increase annually, the rising cost of goods and services essential for retirees is outpacing the growth of these benefits. Furthermore, wages have grown for U.S. workers, yet they have not kept up with inflation costs, and retirees who are no longer receiving a paycheck aren’t reaping the benefits.
As inflation continues to outpace Social Security benefits and wage growth, it’s crucial to understand how these changes affect your financial future. Our team of Trusted Advisors is here to guide you through the implications and provide personalized insights. Don’t let economic shifts catch you off guard—take proactive steps to secure your financial stability.
Contact us today to gain clarity on your unique situation and make informed decisions for a more secure tomorrow.
2024 Cost-of-Living Adjustments for Qualified Retirement Plans
A summary of the cost-of-living adjustments for Qualified Retirement Plans (COLA) effective for 2024 are now available and can be reviewed below. These adjustments recently announced by the Internal Revenue Service (IRS) and the Social Security Administration (SSA) have a wide-ranging impact, including the savings rate for retirement plans. In general, annual compensation amounts and limits for elective deferrals were increased, while catch-up contribution limits remain unchanged.
2024 Cost-of-Living Adjustments Compared to 2023 and 2022:
| Code Section | 2024 | 2023 | 2022 |
| 401(a)(17)/404(1) Annual Compensation | $345,000 | $330,000 | $305,000 |
| 402(g)(1) Elective Deferrals | 23,000 | 22,500 | 20,500 |
| 408(k)(2)(C) SEP Minimum Compensation | 750 | 750 | 650 |
| 408(k)(3)(C) SEP Maximum Compensation | 345,000 | 330,000 | 305,000 |
| 408(p)(2)(E) SIMPLE Maximum Contributions | 16,000 | 15,500 | 14,000 |
| 409(0)(1)(C)(ii) ESOP Limits | 1,380,000 275,000 |
1,330,000 265,000 |
1,230,000 245,000 |
| 414(q)(1)(B) HCE Threshold | 155,000 | 150,000 | 135,000 |
| 414(v)(2)(B)(i) Catch-up Contributions | 7,500 | 7,500 | 6,500 |
| 414(v)(2)(B)(ii) Catch-up Contributions | 3,500 | 3,500 | 3,000 |
| 415(b)(1)(A) DB Limits | 275,000 | 265,000 | 245,000 |
| 415(c)(1)(A) DC Limits | 69,000 | 66,000 | 61,000 |
| 416(i)(1)(A)(i) Key Employee | 220,000 | 215,000 | 200,000 |
| 457(e)(15) Deferral Limits | 23,000 | 22,500 | 20,500 |
| 1.61-21(f)(5)(i) Control Employee | 135,000 | 130,000 | 120,000 |
| 1.61-21(f)(5) (ili) Control Employee | 275,000 | 265,000 | 245,000 |
| Taxable Wage Base for Social Security | 168,600 | 160,200 | 147,000 |
The Impact of COLA for 2024
Derived from the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W) readings for July, August and September, the COLA calculation showed a 2.6% increase in July and a 3.4% rise in August. Why have these numbers increased once more?
In 2022, inflation reached 40-year highs due to a combination of factors, including pandemic stimulus payments, increased consumer spending and widespread supply chain challenges. This prompted the Federal Reserve to implement rapid interest rate hikes, resulting in the current benchmark U.S. interest rate reaching its highest point in more than two decades.
Despite a slight economic slowdown in 2023 compared to the previous year, inflation persists at higher levels than the 2010s. The Senior Citizens League argues, while Social Security benefits increase annually, the rising cost of goods and services essential for retirees is outpacing the growth of these benefits. Furthermore, wages have grown for U.S. workers, yet they have not kept up with inflation costs, and retirees who are no longer receiving a paycheck aren’t reaping the benefits.
As inflation continues to outpace Social Security benefits and wage growth, it’s crucial to understand how these changes affect your financial future. Our team of Trusted Advisors is here to guide you through the implications and provide personalized insights. Don’t let economic shifts catch you off guard—take proactive steps to secure your financial stability.
Contact us today to gain clarity on your unique situation and make informed decisions for a more secure tomorrow.