Updated Contribution Limits in 2024

Securing your financial future is important, and one effective strategy is increasing contributions to tax-advantaged retirement accounts. The IRS updated the contribution limits, so 2024 presents more opportunities to enhance your retirement savings through increased contributions to 401(k)s,403(b)s, and IRAs.

Elevated Limits for Workplace Retirement Plans

For 2024, the IRS has increased the contribution limits for workplace retirement plans. Employees can now contribute:

· $23,000 if under age 50

· $30,500 for those 50 and older, incorporating a $7,500 "catch-up" contribution.

Including employer contributions, the total that can be funneled into these plans reaches up to $69,000 in 2024, or $76,500 for those eligible for catch-up contributions. Remember, the total cannot surpass the annual compensation from your employer.

For those with the option, contributing after-tax dollars to a Roth 401(k) is possible, though it counts towards the $69,000 aggregate limit. Leveraging employer match programs can significantly amplify your retirement contributions, effectively doubling your investment before earnings growth.

Updated IRA Contribution Limits

Reflecting cost-of-living adjustments, IRA contribution limits for 2024 are:

· $7,000 for individuals under 50

· $8,000 for those 50 and older

These limits are the ceiling for total IRA contributions across all accounts, including both Roth and traditional IRAs, and cannot exceed your earned income for the year.

To qualify for full tax-deductible contributions to a traditional IRA in 2024, your modified adjusted gross income must be below:

· $77,000 for single or head-of-household filers

· $123,000 for married couples filing jointly

Roth IRA contributions also have income limits. In 2024, you can make full contributions if your income is below:

· $146,000 for single or head-of-household filers

· $230,000 for married couples filing jointly

Strategic Saving and Planning

Deciding how much to save and in which accounts requires thoughtful planning. The dawn of a new year is the perfect moment to assess or initiate contributions to these accounts. Engage with your financial advisor to tailor your retirement strategy and consult a tax professional for guidance on tax implications.

By staying informed and proactive, you can make the most of the new contribution limits in 2024, setting a solid foundation for your retirement.