How much you can put into a 401(k) and IRA in 2024
Photo by Katie Harp · Unsplash
Every major retirement account limit rose for 2024 — some by more than others. Here is the full table, and what the gap between the old and new numbers is worth over time.
For 2024, the IRS raised the 401(k) employee deferral limit to $23,000 and the IRA limit to $7,000 — the fourth straight annual increase for 401(k)s and the first movement in the IRA limit since 2019. Every major retirement account limit moved, but not by the same amount or for the same reason, and the gap between what you could save under the old limits and the new ones compounds for decades if you actually use it.
Every limit that changed for 2024
| Account | 2023 limit | 2024 limit | Change |
|---|---|---|---|
| 401(k) / 403(b) employee deferral | $22,500 | $23,000 | +$500 |
| 401(k) catch-up, age 50+ | $7,500 | $7,500 | unchanged |
| Traditional / Roth IRA | $6,500 | $7,000 | +$500 |
| IRA catch-up, age 50+ | $1,000 | $1,000 | unchanged |
| HSA, self-only coverage | $3,850 | $4,150 | +$300 |
| HSA, family coverage | $7,750 | $8,300 | +$550 |
| SIMPLE IRA employee deferral | $15,500 | $16,000 | +$500 |
These are the IRS's own published figures for 2024, and every one moves independently — a 401(k) limit increase says nothing about the IRA limit, and neither says anything about the HSA limit, which is set by a different inflation calculation entirely.
Why the 401(k) limit moves more than the IRA limit
Both limits are inflation-indexed, but IRA adjustments only happen in $500 increments, rounded down to the nearest multiple. Inflation has to accumulate enough to justify a full $500 step before the number moves at all, which is why the IRA limit sat at $6,000 from 2019 through 2021, moved once to $6,500 for 2022 and 2023, and only cleared the next $500 threshold for 2024. The 401(k) limit rounds the same way but off a larger base, so it clears a threshold most years even in moderate inflation. Neither pattern is a policy choice about which account matters more — it is arithmetic on the rounding rule.
What actually maxing out looks like
Take someone earning $85,000 who contributes the full 2024 401(k) limit of $23,000 and gets a common employer match of 50% up to 6% of salary — an extra $2,550. Total going into the account for the year: $25,550, of which more than $2,500 is money the employee never had to earn. Add a fully funded IRA on top — $7,000 more, assuming income allows a deductible or Roth contribution — and the household is putting $32,550 a year toward retirement from a $85,000 salary. The compound interest calculator and the future value calculator turn any of these annual figures into a balance at retirement, once you pick a return assumption and a number of years.
What the extra $500 is actually worth
An increase in an annual contribution limit only matters if you use it — the limit is a ceiling, not a requirement. But the arithmetic on using it is worth seeing once. Contributing the full 2024 limit of $23,000 every year instead of the 2023 limit of $22,500 means an extra $500 invested annually. At a 7% average annual return — a common long-run assumption for a diversified stock portfolio — that single $500 difference, contributed every year, adds roughly $15,000 to the balance after 20 years, and considerably more over a full career. The limit increase itself costs nothing to take advantage of; it only requires updating a payroll election that many people set once and never revisit.
Roth or traditional — the $23,000 limit covers both
A detail that trips people up: if a 401(k) plan offers both a traditional (pre-tax) and a Roth (after-tax) option, the $23,000 limit is one combined ceiling across both, not $23,000 into each. Someone contributing $15,000 to the traditional side and $8,000 to the Roth side has used the entire 2024 limit, the same as if all $23,000 went to one or the other. The choice between them is a bet on your tax rate now versus in retirement — traditional contributions reduce this year's taxable income and are taxed on withdrawal, Roth contributions do the opposite — but it does not change how much you are allowed to defer in total.
The HSA: the one with three tax breaks, not one
A traditional 401(k) and a traditional IRA both give you one advantage: contributions go in before tax. A Health Savings Account, available to anyone enrolled in a qualifying high-deductible health plan, gives three: contributions go in pre-tax, the balance grows tax-free, and withdrawals for qualified medical expenses come out tax-free too — a combination no other account offers. The 2024 limits are $4,150 for self-only coverage and $8,300 for family coverage, plus an extra $1,000 if you are 55 or older. Unlike a Flexible Spending Account, an HSA balance rolls over indefinitely and can be invested, which makes it a legitimate long-term retirement vehicle for medical costs specifically, not just a use-it-or-lose-it budget for the current year.
What to check against your own plan
- Confirm your employer's plan actually allows contributions up to the IRS maximum — some plans set a lower internal cap or a percentage-of-salary limit that binds before the federal limit does.
- If you changed jobs mid-year, the $23,000 limit is a per-person limit across all 401(k) plans combined, not per employer — contributing the maximum at two different jobs in the same year can result in an excess contribution that has to be corrected.
- IRA deduction eligibility phases out at higher incomes if you or a spouse is covered by a workplace plan; the contribution limit and the deduction limit are two different numbers.
This is general information, not financial or tax advice. All figures are 2024 IRS limits and do not reflect your specific plan rules, income phase-outs, or state tax treatment. For a decision about your own retirement contributions, speak to a financial adviser or tax professional.