As we approach 2024, it's essential to be well-versed in the latest adjustments to retirement accounts. These changes could significantly impact your financial strategy, and staying informed is key. Here's a breakdown of what you need to know:
Qualified Accounts
2024 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $22,500 to $23,000. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution of $7,500 a year.
2023
2024
Under Age 50 Contribution Limit
$22,500
$23,000
Over Age 50 Contribution Limit
$30,000
$30 ,500
The 2024 contribution limits for an IRA or Roth IRA will increase from $6,500 to $7,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2024 Traditional IRA AGI Limits:
Single or Head of Household: $77,000 – $87,000
Married Filing Jointly (and you’re covered by a retirement plan at work) $123,000 -$143,000
Married Filing Jointly (and your spouse is covered by a retirement plan at work) $230,000 -$240,000
Married Filing Separately: $0 – $10,000
2024 Roth IRA AGI limits:
Single or Head of Household: $146,000 – $161,000
Married Filing Jointly: $230,000 – $240,000
Married Filing Separately: $0 – $10,000
2024 SIMPLE IRA Contribution limits:
The maximum deferral is $16,000 with a catch-up contribution of an additional $3,500
2024 SEP IRA Contribution limits:
The maximum deferral has increased from $66,000 to $69,000
The minimum compensation amount is $750
Defined Contribution Plans –
The 2024 defined contribution plan funding has increased from $66,000 to $69,000.
Defined Benefit Plans –
The 2024 limitation on the annual benefit has increased from $265,000 to $275,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2024, a single taxpayer can contribute $4,150 and family coverage is $8,300. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2024:
The 2024 per beneficiary gift-tax exclusion has increased from $17,000 to $18,000. The gift and estate tax lifetime exclusion has increased from $12,920,000 to $13,610,000. Gifts to a non-citizen spouse has increased from $175,000 to $185,000.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
< COMMENTARY
Updates | November 15, 2023
Retirement Account Inflation Adjustments for 2024
By Kenneth J. Dean CPA, CFP®, CFA, MST
Senior Director, Financial Planning
As we approach 2024, it's essential to be well-versed in the latest adjustments to retirement accounts. These changes could significantly impact your financial strategy, and staying informed is key. Here's a breakdown of what you need to know:
Qualified Accounts
2024 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $22,500 to $23,000. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution of $7,500 a year.
The 2024 contribution limits for an IRA or Roth IRA will increase from $6,500 to $7,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2024 Traditional IRA AGI Limits:
2024 Roth IRA AGI limits:
2024 SIMPLE IRA Contribution limits:
2024 SEP IRA Contribution limits:
Defined Contribution Plans –
The 2024 defined contribution plan funding has increased from $66,000 to $69,000.
Defined Benefit Plans –
The 2024 limitation on the annual benefit has increased from $265,000 to $275,000.
Health care savings accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2024, a single taxpayer can contribute $4,150 and family coverage is $8,300. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2024:
The 2024 per beneficiary gift-tax exclusion has increased from $17,000 to $18,000.
The gift and estate tax lifetime exclusion has increased from $12,920,000 to $13,610,000.
Gifts to a non-citizen spouse has increased from $175,000 to $185,000.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.