New Contribution Limits

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As we approach 2024, the IRS has announced important updates to retirement plan contribution limits, responding to the need for adjustments due to cost-of-living increases. These changes are designed to help individuals optimize their retirement savings. Here's a comprehensive overview of what to expect and how these updates can benefit you.

2024 Contribution Limit Increases

401(k) and Similar Plans:

  1. The contribution limit for 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan is set to increase to $23,000. This adjustment provides an opportunity for employees to invest more in their retirement savings, maximizing tax-deferred growth.

IRA Contribution Limits:

  1. The annual limit for Individual Retirement Accounts (IRAs) will rise to $7,000, allowing more room for savers to build their retirement nest eggs.

Catch-up Contributions:

  1. For those aged 50 and over, the catch-up contribution limit remains at $7,500. When combined with the standard limit, this enables older savers to contribute up to $30,500 to their 401(k) plans, bolstering their savings as they near retirement.

Expanded Income Eligibility

IRA and Saver’s Credit:

  • The income eligibility thresholds for IRA contributions and the Saver’s Credit have increased. These adjustments ensure that more individuals can benefit from tax-advantaged saving opportunities, particularly useful for middle-income families.

SIMPLE Retirement Accounts:

  • Contributions for SIMPLE retirement accounts have been raised to $16,000, providing small business employees and the self-employed with a greater capacity to save.

Highly Compensated Employees:

  • The threshold for determining highly compensated employees for the purpose of conducting nondiscrimination testing is now $155,000.

Strategic Planning with Plan Notice

These updates highlight the importance of staying informed and proactive with your retirement planning. Plan Notice provides tools and resources that help individuals and plan sponsors alike to understand and implement these changes effectively. Our platform ensures that you are always up to date with the latest regulations and best practices, helping you to maximize your retirement benefits.

Now is the ideal time to review your retirement savings strategies in light of these new limits. Consider increasing your contributions if possible, and ensure your plans are aligned with the new regulations. For employers, updating plan documentation and employee communications is critical to ensure compliance and to aid your employees in making informed saving decisions.

For tailored advice and more detailed insights into how the 2024 retirement plan updates affect your specific situation, contact Plan Notice today. Let us help you navigate these changes smoothly and effectively.

Contact Plan Notice for Expert Guidance on Retirement Plan Updates

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