Inflation appears to be on the wane, but it is still likely running hot enough to give a little boost to your efforts to save through a workplace retirement plan.
The base contribution limit for 401(k), 403(b) and eligible 457 plans is likely to rise again for 2024, to $23,000, according to projections from the asset management firm Mercer. That would be a $500 increase from the base limit for 2023.
Catch-up contribution limits for those age 50 and older are projected to remain at $7,500, however.
If the projections turn out to be correct, it will mean that those who are 50 or older may be able to sock away as much as $30,500 in their workplace retirement plan next year.
In 2022, Mercer projected that the base contribution limit would rise from $20,500 to $22,500 for 2023. The firm also projected that the catch-up contribution would rise from $6,500 to $7,500 for 2023. Both of those projections turned out to be accurate.
Mercer notes that contribution limits for 2024 will be based on changes in the Consumer Price Index for All Urban Consumers (CPI-U) — which one of the federal government’s gauges for inflation — from the third quarter of 2022 to the third quarter of 2023.
The IRS should officially announce 2024 contribution limits shortly after September inflation data becomes available in October.