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The IRS announced the new 2024 retirement contribution limits for 401(k) plans, IRAs and other accounts last year, which include increases. This is a great opportunity for retirement savers to increase their savings rate this year. So, let’s take a look.
The employee contribution limit for 401(k)s will be increasing this year by $500, to $23,000, up from $22,500 in 2023, and catch-up contributions for those age 50 and older will remain unchanged at $7,500, so $30,500. These new limits apply to 403(b) plans as well and some TSP and 457 plans. Solo 401(k)s limit for 2024 is $69,000 and $76,500 for those over 50 years old.
The IRS also increased contribution limits for IRAs, increasing the limit for savers to $7,000 in 2024, up from $6,500 in 2023 for traditional and Roth savers. Catch-up contributions will remain unchanged at $1,000, so $8,000 for those over 50 years old. Simple IRA contribution limit will be $16,000.
Another feature to take a look at is the income phaseout range for Roth IRAs in 2024. The IRS increased the adjusted gross income phaseout range rising to between $146,000 and $161,000 for single individuals and heads of households, up from between $138,000 and $153,000 in 2023, leaving more opportunity for individuals to qualify for a Roth IRA. For those married filing jointly, the phaseout range is between $230,000 – $240,000.
If you have any further questions on the retirement contribution limits for this year, adjusting your contribution, or jus on your personal financial situation, email info@shermanwealth.com or schedule a complimentary intro call here. Check out the IRS website for more information on the contribution limits.