Retirement Plan Contribution Limits Increase in 2024

Just as we saw in 2023, the IRS has announced some adjustments to contribution limits as we head into the new year. Starting January 1, 2024, the annual contribution limits for several popular retirement savings plans will be increasing. This presents an excellent opportunity for you to save more towards your retirement goals.

Here is a breakdown of the key updates:

401(k), 403(b) and Most 457 Plans:

The annual elective deferral limit increases by $500, from $22,500 in 2023 to $23,000 in 2024.

Traditional and Roth IRAs:

The annual contribution limit increases by $500, from $6,500 in 2023 to $7,000 in 2024. This applies to both traditional and Roth IRAs, allowing you to save even more for retirement.

The IRA catch-up contribution limit for people aged 50 and over remains $1,000 for 2024. Catch-up limits allow older plan participants to put away more money, since they have less time to save.

SIMPLE IRAs:

The amount individuals can contribute is increased from $15,500 in 2023 to $16,000 in 2024.

SEP-IRA and Profit Sharing:

The annual contribution limit increases from $66,000 in 2023 to $69,000 in 2024.

Why are these changes important?

These increases in contribution limits allow you to save more money for your future and potentially achieve your retirement goals faster. We encourage you to review your current contribution amounts and consider taking advantage of these higher limits.

What should you do next?

To ensure you are maximizing your retirement savings, we recommend:

• Reviewing your current contribution amounts and assessing if you can increase them to take advantage of the higher limits.
• Considering catch-up contributions if you are age 50 or over. Catch-up contributions allow individuals to contribute an additional amount on top of the regular limit.
• Consulting with your financial advisor to discuss your specific retirement goals and develop a personalized savings plan.

We understand that these changes may raise questions. Please do not hesitate to contact us for guidance. We are here to help you make informed decisions and maximize your retirement savings.