Annual contribution limits for 401(k) plans, IRAs, SIMPLE plans, and more have been increased. Now is the best time to plan your 2024 retirement contributions to take full advantage of this tax benefit.
• Review the annual contribution limits for your retirement plan type. The 2024 annual contribution limit for 401(k) and 403(b) plans is $23,000 with a catchup contribution of $7,500 for those 50 and up. The limit for SIMPLE IRA is $16,000 with a catch-up contribution limit of $3,500. If you are 50 years or older, add the catch-up amount to your potential savings total.
• Make adjustments to your employer-provided retirement savings plan as soon as possible in 2024 to adjust your contribution amount.
• Double check to ensure you are taking full advantage of any employee matching contributions into your account.
• Use this time to review and re-balance your investment choices according to your situation.
• Set up new accounts for a spouse and/or dependents. Enable them to take advantage of the higher limits, too.
• While you are reviewing your savings accounts, be sure to take the time to verify your beneficiary designations.
• Consider IRAs. Many employees maintain employer-provided plans without realizing they could also establish a traditional or Roth IRA. Use this time to review your situation and see if these additional accounts might benefit you or someone else in your family.
• Review contributions to other tax-advantaged plans, including flexible spending accounts (FSAs), and health savings accounts (HSAs).
The best way to take advantage of increases in annual contribution limits is to start early in the year. Better yet, make an appointment to discuss your specific situation with a trusted financial advisor.
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