2024 Brings Exciting Increases to 401(k) and IRA Contribution

Hey Savvy Savers!

Big news from the IRS: starting in 2024, you can put more money into your retirement savings! This is a fantastic opportunity to boost your nest egg, and I’m here to break down all the details for you in a simple, easy-to-understand way.

1. More Money in Your 401(k):

In 2024, You have the opportunity to contribute a maximum of $23,000 to your retirement savings, including options like 401(k), most 457 plans, 403(b), and the Federal Government’s Thrift Savings Plans. That’s a $500 increase from 2023!

2. IRA Contributions Get a Boost:

Good news for IRA savers! The contribution limit is now $7,000, up from $6,500. And if you’re 50 or older, you still have the additional $1,000 catch-up contribution.

3. Catch-Up Contributions for the 50+ Crowd:

If you’re over 50, your catch-up contribution limit for 401(k), most 457 plans, 403(b), and the Federal Government’s Thrift Savings Plan, remains at $7,500. This means you could contribute a total of $30,500 in 2024!

4. Income Ranges for Deductions and Credits Increase:

• Traditional IRA Phase-Out Ranges Increase: The income limits for tax deductions on your IRA contributions have increased. For singles covered by a workplace plan, it’s now $77,000 to $87,000. For married couples, it varies based on whether one or both are covered by a workplace plan.
• Roth IRA Phase-Out Ranges Rise: For singles, the new range is $146,000 to $161,000, and for married couples filing jointly, it’s $230,000 to $240,000.
• Saver’s Credit Adjusted: This credit for low- and moderate-income workers now has higher income limits.
  

5. SIMPLE Retirement Account Cap Increases:

You can now contribute up to $16,000 to your SIMPLE retirement accounts, up from $15,500.

6. Additional SECURE 2.0 Updates:

• Longevity Annuity Contract Cap: The limit remains at $200,000.
• Charitable Distribution Limit Increase: Now at $105,000.
• New Deductible Limit for Certain IRA Distributions: Set at $53,000.
  

Final Thoughts:

These changes, detailed in IRS Notice 2023-75, are a part of ongoing efforts to help Americans build a more secure retirement. Whether you’re just starting your savings journey or looking to maximize your contributions, this is great news.

So, let’s get excited about saving more in 2024! For more detailed info, head over to IRS.gov.

Happy Saving, Everyone!