The Internal Revenue Service (IRS) has recently unveiled key updates for the year 2024 concerning retirement contribution limits. These adjustments impact various savings plans, including 401(k), 403(b), IRAs, and more. In this comprehensive guide, we’ll break down the changes and explore how they might affect your retirement planning.
401(k) and Similar Plans:
– The contribution limit for employees participating in 401(k), 403(b), and most 457 plans has increased to $23,000 from $22,500.
– Catch-up contributions for those aged 50 and over remain at $7,500, allowing a total contribution of up to $30,500 for eligible individuals starting in 2024.
Individual Retirement Arrangements (IRAs):
– The annual contribution limit for IRAs has risen to $7,000 from $6,500.
– Catch-up contributions for individuals aged 50 and over stay at $1,000 for 2024.
Income Ranges and Phase-Outs:
– Various income ranges have been adjusted for deductible contributions to traditional IRAs and contributions to Roth IRAs.
– Notable changes include an increased phase-out range for single taxpayers and married couples filing jointly.
– The Saver’s Credit income limits have been updated for 2024, providing more opportunities for low- and moderate-income workers to claim the credit.
Additional Changes under SECURE 2.0:
– Various limits, including premiums for qualifying longevity annuity contracts, deductible limits on charitable distributions, and limits for one-time elections, have been adjusted.
The IRS’s announcement brings crucial changes to retirement contribution limits for 2024, impacting 401(k) plans, IRAs, and more. Staying informed about these adjustments is vital for individuals planning their retirement savings strategy. If you’re unsure about how these changes affect you, click here or call us at (800) 875-5509 so we can help ensure you make the most of your retirement planning.