2024 IRS Retirement Plan Limits
As in years past, 2023 was another one full of ups and downs, and I know many of us are looking forward to what the new year has in store. As 2023 comes to a close, it’s a great time to reassess our financial situation and planning considerations as we look into the year ahead. Each calendar year, the IRS adjusts contribution limits for retirement plans to account for inflation. Again, 2024 is no different as the IRS has recently announced the new retirement plan contributions for the year ahead.
Here are some of the more notable changes for 2024:
2024 Retirement Plan Limits for 401(k)/403(b)
Let’s start off with the most common plans. The limit is for 401(k) and 403(b) plans is $23,000 for 2024, up from $22,500 last year. If you are age 50 or older, you also are allowed a “catch up” contribution to encourage additional savings, which is $7,500 again this year for a total maximum contribution of $30,500.
The other adjustment is to total contributions. The adjustment to the TOTAL limit for these plans has increased to $69,000 ($76,500 including catch up contributions) in 2024 from $66,000 ($73,500 including catch up contributions) in the previous year. These amounts include employer contributions, after-tax contributions, etc., and are the absolute maximum amount that can be contributed to these plans in a given year.
2024 Retirement Plan Limits for Traditional IRAs and Roth IRAs
In 2024, the IRS has increased the contribution limit for IRAs again. In 2024, savers can contribute $7,000, up from $6,500 in previous years. There is also an additional $1,000 “catch-up” contribution available to those 50 and older for a total of up to $8,000. Please keep in mind that IRAs and Roth IRAs have income considerations, which have been adjusted for 2024, so be sure to review these income thresholds before making contributions.
2024 Retirement Plan Limits for HSAs
HSA savings account limits have increased again for 2024. In 2024, the family plan maximum contributions have increased $550 for a total of $8,300. Individuals also increased by $300 to a level of $4,150 for 2024.
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2024 Retirement Plan Limits for SEP IRAs
Business owners and self-employed individuals will be able to save a bit more this year as well. The maximum contribution to a SEP IRA increases to $69,000 in 2024, up from $66,000 in 2023. This maximum is subject to a percentage of income calculation as well.
2024 Retirement Plan Limits for SIMPLE IRA Plans
Employees with a SIMPLE IRA plan (typically used in smaller groups) will see an increase of $500 in 2024. The SIMPLE maximum contribution will now be $16,000 in 2024, up from $15,500 last year. SIMPLE IRA participants over age 50 are also eligible to save an additional $3,500 “catch-up” contribution, the same amount as in 2023.
There are slight differences in 2024 for retirement contribution limits, so be sure to adjust your savings to take full advantage of your retirement accounts. Hopefully, 2024 is your best year yet, and we can look forward to less volatility in the year ahead!
If we can answer any questions about how this may relate to your financial plan, please get in touch with us below!