Retirement Account Contribution Limits For 2024 -

Retirement Account Contribution Limits For 2024

Nov 03, 2023Jeremy ParkinsonFinance0

Image Source: PixabayYou get to save more in your retirement accounts in 2024. The IRS has made its inflation calculations and announced the new adjusted contribution limits.The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan increases to $23,000, up from $22,500 in 2023. For individuals 50 and older, the catch-up contribution limit remains at $7,500. So, if you qualify for catch-up contributions you can contribute up to $30,500 next year.IRA contributions, both Traditional and Roth, move up to $7,000 from $6,500. The catch-up contribution limit remains at $1,000.Contributions to SIMPLE IRA retirement accounts go to $16,000, up from $15,500. The catch-up contribution limit for SIMPLE plans remains at $3,500.The 2024 income ranges for determining eligibility to make deductible contributions to Traditional IRAs and Roth IRAs have also been adjusted upward for inflation.Taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.) Here are the phase‑out ranges for 2024:

For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to $77,000-$87,000, up from $73,000-$83,000.

For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to $123,000-$143,000, up from $116,000-$136,000.

The income phase-out range for taxpayers making contributions to a Roth IRA is increased to:

$146,000-$161,000 for singles and heads of household, up from $138,000-$153,000.

For married couples filing jointly, the income phase-out range is increased to $230,000-$240,000, up from $218,000-$228,000.

With all these numbers about how much you can contribute in 2024, don’t forget the Required Minimum Distribution (RMD) side of the discussion. With the retirement plan changes that resulted from the SECURE Act 2.0, there’s been some confusion about when RMDs must take place. SECURE 2.0 raised the age to begin required distributions to 73. Don’t confuse that with the old law which required RMDs a year earlier. Taking a distribution before you’re required to means you’ll pay federal and state taxes on a distribution you didn’t have to take.More By This Author:Macro: Challenger Job Cuts — Improvement Throughout The Year Macro: Oct S&P Final And ISM PMIMacro: GDPNow — A Market Mover