Every year the IRS makes annual adjustments to account for inflation.  These adjustments range from tax brackets to IRA contribution limits.  This week the IRS announced the updates for 401K and IRA contribution limits and Roth phase outs.

The year 2024 will see an increase in both 401k and IRA contribution limits: The contribution limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan will increase to $23,000, up from $22,500. The limit on IRA annual contributions increased to $7,000 from $6,500 in 2023.¹

In addition to these increases, the catch-up contribution limit for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan for employees aged 50 and over, remains at $7,500 for 2024. The catch-up contribution limit for individuals aged 50 and over remains unchanged at $1,000.² 

Another key change this coming year is a relatively large increase to the Roth phase-out cap: The income phase-out range for taxpayers making contributions to a Roth IRA will increase to $146,000 and $161,000 for single filers and heads of households; up from $138,000 and $153,000. And for married couples filing jointly, the income phase-out range increases to between $230,000 and $240,000, up from $218,000 and $228,000. For married individuals filing separately, who is covered by a workplace plan, their income phase-out remains the same from last year at $0 and $10,000.³

The Saver’s Credit (Retirement Savings Contributions Credit) income limit was increased for all filing groups. Married couples filing jointly increased to $76,500, up from $73,000. Head of household went up from $54,750 in 2023 to $57,375 and married individuals filing separately went up to $38,250 from $36,500.⁴

What does this mean for retirement planning?

Soon to be retirees should be aware of these new limits for 2024 so they can plan to max out their retirement savings accounts where appropriate.  Silvur will also update this data as part of our annual Retirement Score updates

How Silvur can help you in 2024!

Silvur's data platform helps your team identify consumers who are most likely to move assets in the next 3 years so you can grow your share of the retirement wallet.  We also flag which consumers are getting ready to retire ensuring you don't lose direct deposit/ PFI status.

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SOURCES

1. “401(k) limit increases to $23,500 for 2024, IRA limit rises to $7,000.” IRS.gov, 1 November 2023, https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000. Accessed 1 November 2023.
2. Ibid.
3. Ibid.
4. Ibid.