The Internal Revenue Service (IRS) has unveiled the updated contribution limits for qualified retirement plans in 2024, offering American taxpayers expanded opportunities for savings. The IRS’s Notice 2023-75 highlights a significant $500 increase across various retirement savings options, providing individuals and families with additional avenues to secure their financial future.
1. Sec. 401(k) Plans Get a Boost:
Contributions to Sec. 401(k) plans, Sec. 403(b) plans, and most Sec. Four hundred fifty-seven plans are set to rise to $23,000 in 2024, up from $22,500 this year. This increase empowers employees to bolster their retirement savings, ensuring a more secure financial outlook.
2. Enhanced Limits for Traditional and Roth IRAs:
The annual contribution limit for both traditional and Roth IRAs has been elevated to $7,000, offering individuals greater flexibility in managing their retirement funds. Additionally, those aged 50 and above can make catch-up contributions of up to $1,000, facilitating accelerated savings for older Americans.
3. Catch-Up Contributions for Individuals 50 and Older:
Employees aged 50 and above participating in Sec. 401(k), Sec. 403(b), and most Sec. Four hundred fifty-seven plans, as well as the federal government’s Thrift Savings Plan, can take advantage of a catch-up contribution limit of $7,500 for 2024. This means eligible participants can contribute up to a total of $30,500 in the coming year.
4. Boosted Savings Opportunities for SIMPLE Plans:
Participants in SIMPLE plans can now contribute up to $16,000, up from the previous limit of $15,500. For those aged 50 and above, the catch-up contribution limit remains at $3,500, encouraging increased retirement savings among older workers.
5. Expanded Income Ranges for Tax Benefits:
The IRS has widened the income ranges, determining eligibility for deductible contributions to traditional IRAs, contributions to Roth IRAs, and claiming the saver’s credit. This adjustment ensures that more Americans can take advantage of these tax benefits, promoting a culture of saving for retirement.
These revisions provide American taxpayers with valuable financial planning options, allowing them to make informed decisions to secure their financial future. As the nation looks forward to 2024, these increased limits herald a positive step toward enhanced retirement security for individuals and families nationwide.
Source ( Journal of Accountancy News).
