Contribution limits for 401(k)s, IRAs and other retirement accounts are going up in 2024.
The IRS, which regulates annual contribution limits on qualified and tax-advantaged retirement accounts, announced the 2024 contribution limits for various plans on Wednesday. A contribution limit demarcates the amount an employee can contribute to their respective retirement plan in a given year. Contribution limit increases help combat the effects on inflation and cost of living increases.
Talk to a financial advisor today to set up a retirement plan for your goals.
Financial advisors typically recommend maxing out your tax-advantaged retirement plans if you already have an adequate emergency fund, particularly if there’s a company match involved. So, it may be time to take a look at your budget for 2024.
The contribution limit for 401(k), 403(b), Thrift Savings Plans and most 457 plans will be $23,000 in 2024, rising from $22,500 in 2023. Catch-up contributions for people ages 50 and older will remain $7,500.
The contribution limit for IRAs will be $7,000 in 2024, increasing from $6,500 in 2023. IRA catch-up contributions for people ages 50 and older will remain $1,000.
|Account type||2024 contribution limit||2023 contribution limit|
|401(k), 403(b), most 457 plans, Thrift Savings Plan||$23,000||$22,500|
|Catch-up contribution, 401(k), 403(b), most 457 plans, Thrift Savings Plan (age 50 or older)||$7,500||$7,500|
|IRA, Roth IRA||$7,000||$6,500|
|Catch-up contribution, IRA (age 50 or older)||$1,000||$1,000|
Keep in mind, tax implications may vary across retirement accounts, and your income level may affect how your taxes are treated. A financial advisor can help you understand the best way to structure your finances for your short-term and long-term goals.
Retirement Planning Tips
- Social Security plays an important role in the retirement plans of most Americans. Delaying Social Security will increase your eventual benefits, but it may not be feasible for everyone’s financial situation. SmartAsset’s Social Security calculator can help you estimate how much your benefits will be based on when you plan to claim them.
- A financial advisor can help you save and plan for retirement. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can have a free introductory call with your advisor matches to decide which one you feel is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
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