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Adam Frank

Managing Director, Head of Wealth Planning and Advice, J.P. Morgan Wealth Management

The IRS released the retirement contribution limits for 20241 and we are breaking it down for you. Talk to a J.P. Morgan professional to begin planning your 2024 retirement contributions. And don't forget to reach out to tax professionals for tax advice.

Traditional or Roth IRA

Maximum contribution2

$7,000 ($8,000 if age 50 or over)

Maximum deduction2

$7,000 ($8,000 if age 50 or over) for traditional IRA; no deduction for Roth IRA contributions

Deadline for adoption

Due date of taxpayer’s federal tax return (not including extensions)

Last contribution date

Due date of taxpayer’s federal tax return (not including extensions)

Qualified Defined Contribution Plan

Maximum contribution

Employee Elective contribution: deferral up to $23,000 ($30,500 if age 50 or over)7

Employer Nonelective contribution: Lesser of $69,000 or 100%3 ($76,500 if age 50 or over)7 of participant’s compensation (reduced by any elective deferrals)4

Maximum deduction

25%3 of all participants’ compensation,4 plus amount of elective deferrals made

Deadline for adoption

Anytime up to the due date of employer's federal tax return (including extensions)

Last contribution date

Employee Elective deferral: Due date of employer’s federal tax return (including extensions)6

Employer nonelective contribution: Due date of employer’s federal tax return (including extensions)

Qualified Defined Benefit Plan

Maximum contribution

Amount needed to provide an annual benefit no larger than the smaller of $275,000 or 100% of the participant’s average compensation for his or her highest three consecutive calendar years

Maximum deduction

Based on actuarial assumptions and computations

Deadline for adoption

Anytime up to the due date of employer's return (including extensions)

Last contribution date

Contributions generally must be paid in quarterly installments depending on the plan year; due 15 days after the end of each quarter (potentially subject to minimum funding requirements)

Simplified Employee Pension (SEP) IRA

Maximum contribution

Lesser of $69,000 or 25%3 of participant’s compensation4

Maximum deduction

25%3 of all participants’ compensation4

Deadline for adoption

Anytime up to the due date of employer’s federal tax return (including extensions)

Last contribution date

Due date of employer’s federal tax return (including extensions)

SIMPLE IRA and SIMPLE 401(k)

Maximum contribution

Employee contribution: Salary reduction contribution up to $16,000 ($19,500 if age 50 or over)5

Employer contribution: Either dollar-for-dollar matching contributions, up to 3% of employee’s compensation,6 or fixed non-elective contributions of 2% of compensation4

Maximum deduction

Same as maximum contribution

Deadline for adoption

Anytime between January 1 and October 1 of the calendar year. For a new employer coming into existence after October 1, as soon as administratively feasible

Last contribution date

Salary reduction contributions: 30 days after the end of the month for which the contributions are to be made7

Matching or non-elective contributions: Due date of employer’s return (including extensions)

The amount of salary deferrals someone can contribute to retirement plans is the individual limit each calendar year no matter how many plans (e.g., 401k, 403b, SIMPLE) they are participating.

Catch-up contributions allowed if permitted by the plan. Check with your employer.

References

1.

Internal Revenue Service Publication 560 - Retirement Plans for Small Business; Internal Revenue Service Publication 590-A - Contributions to Individual Retirement Arrangements; IRS Notice 2023-75.

2.

A taxpayer who is covered by a retirement plan at work, or whose spouse is covered by a retirement plan at work, may not be able to deduct all or part of his or her traditional IRA contributions depending on his or her modified Adjusted Gross Income (AGI). Similarly, your ability to contribute to a Roth IRA may be limited based on your modified AGI. You should consult with your tax professional to confirm whether you are able to deduct your traditional IRA contribution or contribute to a Roth IRA.

3.

Net earnings from self-employment must take the contribution into account. Contributions made on behalf of self-employed individuals can be more complex; please see Internal Revenue Service Publication 560 for more information, or speak to your tax professional.

4.

Compensation is generally limited to $345,000 in 2024. Compensation is generally limited to $345,000 in 2024. Effective January 1, 2024, employers are permitted to make additional contributions to each participant in a SIMPLE plan in a uniform manner, provided that the contribution may not exceed the lesser of 10% of compensation or $5,000 (indexed).

5.

Additionally, the SIMPLE plan annual deferral and catch-up contribution limits can be increased by 10%, as compared to the IRS limit that would otherwise apply, in the case of an employer with no more than 25 employees. An employer with 26 to 100 employees would be permitted to provide these higher deferral limits, but only if the employer either provides a 4% matching contribution or a 3% “nonelective” employer contribution.

6.

Under a SIMPLE 401(k) plan, compensation is generally limited to $345,000 in 2024.

7.

Certain plans subject to Department of Labor rules, such as 401(k) plans, may have an earlier due date for salary reduction contributions and elective deferrals.

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J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC Insurance products are made available through Chase Insurance Agency, Inc. (CIA), a licensed insurance agency, doing business as Chase Insurance Agency Services, Inc. in Florida. Certain custody and other services are provided by JPMorgan Chase Bank, N.A. (JPMCB). JPMS, CIA and JPMCB are affiliated companies under the common control of JPMorgan Chase & Co. Products not available in all states.

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