Click for your 2024 important numbers.
It’s important to know that each year in the fourth quarter we usually get new financial thresholds and limits from the IRS for various retirement plans, annuities, filing credits, Medicare surcharges, and a whole lot of other vital numbers for the coming year. Many of us tend to fixate on the amount of our 401(k) annual contribution limit and don’t realize that this number changes from year-to-year.
For example, in 2024 your contribution limit for your 401(k), 403(b), or 457 plan is now $23,000. If you are age 50 and over, you can contribute another $7,500. It’s also important to note for those of you with 403(b) plans that you may be eligible for a special catch up amount of $3,000 if you have 15+ years of service. Check your plan!
For IRA fans, the new contribution limit for 2024 is $7,000. That’s up $500 from last year. Again, if you are age 50 or older, you get an extra $1,000 contribution limit. So, if you’re over 50, that’s $8,000 you can put in your IRA.
The Roth IRA eligibility MAGI has also increased. For singles, you can now make between $146,000 and $161,000 and still make a partial contribution. Under $146,000 and you may be eligible for a full contribution. For married filing joint, your phaseout starts at $230,000 and goes to $240,000.
There’s another big change in Roth accounts in 2024. This positive development is that Roth accounts in employer plans will be exempt from RMDs starting in 2024. You may recall this was previously a quirky difference between a Roth IRA and a Roth 401(k). Now, the retirement plan Roth account is treated more like a Roth IRA. No RMD!
Some good news for student loan borrowers. Employers can now offer matching for student loan payments. Starting this year, employers can "match" payments employees make on student loans with matching payments to workplace retirement plans. The match is not necessarily dollar-for-dollar. This is to incentivize employees to make their student loan payments and still give them a chance to save for retirement. So far, this aspect of student loan relief (unlike other aspects in 2023) has not been challenged in court. My understanding at this time, is that this matching doesn’t increase the overall maximum contribution limits.
I have a handy chart for you that summarizes the important numbers for 2024. In conjunction with fpPathfinder, please click 2024 Important Numbers to access your copy. This handy reference is stuffed with 2024 new and updated thresholds and limits. If you have any questions, or trouble accessing the chart, be sure to reach out to me.
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