2024 Retirement Savings Changes: IRS Updates 401(k) and IRA Limits

In a recent announcement, the IRS has shed light on the 2024 Retirement Savings Changes, particularly focusing on the contribution limits for various retirement accounts.

There are some changes, in the 401(k) plans. In 2024 employees will have the opportunity to contribute up to $23,000, which’s higher, than years limit of $22,500.

However individuals aged 50 and above will still be able to make catch up contributions of $7,500. It’s important to mention that these new figures apply not to 401(k) plans but also extend to 403(b) plans, a majority of 457 plans and Thrift Savings Plans.

IRA Contribution Enhancements

The 2024 Retirement Savings Changes also bring good news for Individual Retirement Accounts (IRA) enthusiasts. The IRS has made a decision to raise the amount of money that can be contributed to IRAs.

Starting in 2024 investors will now be able to save, up to $7,000, which’s an increase from the limit of $6,500 in 2023. However for those who’re a little behind on their savings journey and need to catch up the catch up contribution limit will remain at a $1,000.

You may also want to read: Understanding the Different Types of Retirement Plans

Another important update relates to the range of income at which individuals can contribute to Roth IRAs. In 2024 single individuals and heads of households will have an expanded range.

The new range now stands between $146,000 and $161,000 compared to the range of $138,000 to $153,000, in 2023.

The 2024 Retirement Savings Changes are a testament to the IRS’s commitment to facilitating better retirement savings for Americans.

Whether you’re a worker seeking to optimize your 401(k) contributions or an individual striving to capitalize on your IRA these modifications are certain to enhance your prospects.