On October 12, 2023, the Social Security Administration (SSA) announced the 2024 Social Security Wage base increase from $160,200 to $168,600. The IRS (Internal Revenue Service) announced the 2024 cost-of-living adjustments for various retirement plan limits on November 1, 2023.
Below are selected adjustments applicable to employer-sponsored retirement plans effective January 1, 2024. Additional details are available in the IRS Notice 2023-75 and in the 2024 Social Security Changes Fact Sheet.
| RETIREMENT PLAN LIMITS | 2023 | Δ | 2024 |
|---|---|---|---|
| Annual compensation limit | $330,000 | ↑ | $345,000 |
| 401(k), 403(b) & 457(b) before-tax contributions | $22,500 | ↑ | $23,000 |
| Catch-up contributions (if age 50 or older) | $7,500 | → | $7,500 |
| Highly compensated employee threshold | $150,000 | ↑ | $155,000 |
| Key employee officer compensation threshold | $215,000 | ↑ | $220,000 |
| Defined benefit plan annual benefit and accrual limit | $265,000 | ↑ | $275,000 |
| Defined contribution plan annual contribution limit | $66,000 | ↑ | $69,000 |
| Employee stock ownership plan (ESOP) limit for determining the lengthening of the general five-year distribution period |
$265,000 | ↑ | $275,000 |
| ESOP limit for determining the maximum account balance subject to the general five-year distribution period |
$1,330,000 | ↑ | $1,380,000 |
| SOCIAL SECURITY WAGE BASE | 2023 | Δ | 2024 |
| Social Security Maximum Taxable Earnings | $160,200 | ↑ | $168,600 |
Phil DeDominicis is an ESOP strategist and M&A advisor who has guided 300+ companies through ESOP formations, financing, and transactions over 20+ years at Menke & Associates. He specializes in selling ESOP‑owned businesses to financial or strategic buyers and in helping ESOP companies acquire other businesses.
