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Retirement contribution limits rise for 2024

Retirement contribution limits rise for 2024

Introduction to the new limits

The IRS has announced new contribution limits for retirement plans in 2024, with increases reflecting the cost-of-living adjustments.

These changes include higher contribution possibilities for 401(k) plans and Individual Retirement Accounts (IRAs).

Adjustments to 401(k) plans

The new year brings a boost to 401(k) contributions, with the limit now set at $23,000, up by $500.

This applies to employees who are part of:

  • 401(k) plans
  • 403(b) plans
  • Most 457 plans
  • The federal government's Thrift Savings Plan

IRA contribution limit increases

IRA contributors will see their annual limit increase to $7,000 from $6,500.

The catch-up contribution limit for those aged 50 and above remains steady at $1,000.

Details on catch-up contribution limits

For those 50 and older, the catch-up contribution limit is unchanged at $7,500 for:

This means eligible participants can contribute up to $30,500 in 2024.

The catch-up limit for SIMPLE plans is still $3,500.

Adjusted income ranges for IRA eligibility

Income ranges for IRA contributions have increased, affecting eligibility for deductible contributions to traditional IRAs, Roth IRA contributions, and the Saver's Credit.

Phase-out ranges for traditional IRAs

The phase-out ranges for traditional IRA contributions are now:

  • Single taxpayers with a workplace retirement plan: $77,000 to $87,000
  • Married couples filing jointly where one spouse has a workplace plan: $123,000 to $143,000
  • Contributors without a workplace plan but with a spouse who has one: $230,000 to $240,000
  • Married filing separately with a workplace plan: $0 to $10,000 (unchanged)

Phase-out ranges for Roth IRAs

The new phase-out ranges for Roth IRA contributions are:

  • Singles and heads of household: $146,000 to $161,000
  • Married couples filing jointly: $230,000 to $240,000
  • Married filing separately: $0 to $10,000 (unchanged)

Saver's credit income limits

The Saver's Credit income limits have been adjusted to:

  • Married filing jointly: $76,500
  • Head of household: $57,375
  • Single and married filing separately: $38,250

Contribution limits for SIMPLE retirement accounts

The contribution limit for SIMPLE retirement accounts is now $16,000, an increase from $15,500.

Additional changes from the SECURE 2.0 Act

Further changes from the SECURE 2.0 Act include:

  • The limit for qualifying longevity annuity contract premiums remains at $200,000.
  • The deductible limit for charitable distributions is now $105,000.
  • A new deductible limit for distributions to split-interest entities is set at $53,000.

For more information on these and other retirement-related adjustments, see Notice 2023-75.

Ines Zemelman, EA
Founder of TFX