2024 Retirement Plan Updates

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As we move into 2024, the IRS has announced significant updates to retirement plan contributions, reflecting changes designed to help individuals enhance their retirement savings. Here's a detailed look at these adjustments and what they mean for you.

Key Changes in 2024 Contribution Limits

401(k) Contribution Increase:

  1. The annual contribution limit for 401(k) plans has been raised to $23,000, up from $22,500. This increment allows participants to save more towards their retirement, leveraging the benefits of tax-deferred growth.

IRA Contribution Adjustments:

  1. The contribution limit for Individual Retirement Accounts (IRAs) has also seen an increase to $7,000. This adjustment provides an opportunity for those who prefer IRAs or those without employer-sponsored plans to also save more.

Catch-up Contributions:

  1. For participants aged 50 and above, the catch-up contribution limit remains at $7,500, making the total possible contribution to eligible 401(k) plans $30,500. This unchanged catch-up limit continues to support older workers in accelerating their retirement savings as they approach retirement age.

Income Ranges for IRA Eligibility

Traditional IRA:

  • For single taxpayers, the phase-out range for deductible contributions now lies between $77,000 and $87,000. For married couples filing jointly, the range is adjusted to $123,000 to $143,000.

Roth IRA:

  • The phase-out ranges for eligibility have also been revised. For singles and heads of household, the range is now $146,000 to $161,000. Joint filers will find their new phase-out range from $230,000 to $240,000.

Saver’s Credit Adjustments

The Saver’s Credit income limits have increased, providing enhanced incentives for lower and moderate-income individuals to contribute to retirement savings. This credit remains a critical tool for making retirement savings more accessible and rewarding for a broader segment of the workforce.

Plan Notice: Your Guide to Maximizing Retirement Savings

At Plan Notice, we recognize the importance of staying updated with the latest retirement plan changes. Our platform helps plan sponsors and participants alike to navigate these updates effectively. We ensure that all necessary adjustments are communicated clearly and promptly, enabling participants to make the most of their retirement planning efforts.

As the new contribution limits take effect, it's an opportune time to review and possibly adjust your retirement savings strategies. Plan sponsors should update their plan documents and employee communications to reflect these changes. Participants should consider increasing their contributions to take full advantage of the higher limits.

For more detailed information on how these 2024 retirement plan updates affect you and how Plan Notice can assist in optimizing your retirement planning, contact us today.

Learn More About 2024 Retirement Plan Updates with Plan Notice

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