Understanding the Latest Retirement Contribution Limits for 2024
Planning for retirement is crucial, and staying updated on the latest contribution limits can help you maximize your savings. For 2024, the IRS has announced several changes to retirement account contribution limits, reflecting cost-of-living adjustments. Here’s a breakdown of what you need to know:
401(k) Plans
For 2024, the contribution limit for 401(k) plans has increased to $23,000, up from $22,500 in 20231. If you’re 50 or older, you can make additional catch-up contributions of $7,500, bringing your total possible contribution to $30,5001.
Individual Retirement Accounts (IRAs)
The contribution limit for IRAs has also seen an increase. For 2024, you can contribute up to $7,000 to your IRA, up from $6,500 in 20231. If you’re 50 or older, you can make an additional catch-up contribution of $1,000, making the total limit $8,0001.
SIMPLE Plans
For those participating in SIMPLE retirement plans, the contribution limit remains at $15,500 for 2024. However, if you’re 50 or older, you can make catch-up contributions of $3,500, allowing for a total contribution of $19,0001.
Phase-Out Ranges for IRAs
The income ranges for determining eligibility to make deductible contributions to traditional IRAs have also increased. For single taxpayers covered by a workplace retirement plan, the phase-out range is now between $77,000 and $87,0001. For married couples filing jointly, the phase-out range is between $123,000 and $143,000 if the spouse making the IRA contribution is covered by a workplace retirement plan1.
Roth IRAs
For Roth IRAs, the income phase-out range for single taxpayers is now between $146,000 and $161,0001. For married couples filing jointly, the range is between $230,000 and $240,0001.
Saver’s Credit
The income limits for the Saver’s Credit have also been adjusted. For 2024, the income limit for single filers is $36,500, and for married couples filing jointly, it is $73,0001.
Conclusion
These adjustments are designed to help individuals save more for retirement by taking into account inflation and cost-of-living increases. It’s essential to review these limits annually and adjust your contributions accordingly to maximize your retirement savings.