On November 1, the Internal Revenue Service (IRS) shared updated contribution limits for retirement accounts in 2024. As you prepare for the new year, be sure to account for these higher limits in order to make the most of your retirement savings and minimize your tax burden.
Here's a breakdown of what you need to know:
401(k) and Similar Plans:
If you're contributing to a 401(k), 403(b), or most 457 plans, or the federal government's Thrift Savings Plan, you'll now be able to contribute up to $23,000 in 2024, (up $500 from the limit of $22,500 in 2023). The catch-up contribution limit for employees aged 50 and over for these plans remains at $7,500 for 2024 (no change from 2023).
For those investing in Individual Retirement Accounts (IRAs), the annual contribution limit will increase to $7,000 from $6,500. If you're 50 or older, the catch-up contribution amount remains at $1,000 for 2024 (no change from 2023).
Income Ranges (for determining eligibility to make deductible IRA contributions):
For those planning to make deductible contributions to traditional IRAs or contribute to Roth IRAs, it's important to note the changes in income ranges. These changes might affect your eligibility for specific tax benefits. Detailed information can be found in IRS Notice 2023-75.
Keeping abreast of these changes and adjusting your financial strategy accordingly can help you stay on track with your retirement goals. If you have specific concerns or questions, please do not hesitate to contact us for guidance based on your individual circumstances.