The Inner Income Service has boosted the quantity people can contribute to their 401(ok) retirement plans subsequent yr by $500 to $23,000.
The rise is far lower than the $2,000 hike that savers noticed this yr. That enhance was the largest greenback enhance since 2007 and got here amid rising issues about excessive inflation.
The brand new contribution restrict, which displays the price of residing, additionally applies to workers who take part in 403(b) plans, most 457 plans and the federal authorities’s Thrift Financial savings Plan. The restrict on IRA catch-up contributions for workers aged 50 and over who take part in these plans will probably be elevated from $6,500 to $7,000, the IRS stated.
The adjustments imply that retirement savers who’re 50 or older can save as much as $30,500 subsequent yr of their 401(ok), 403(b), and most 457 plans in addition to the federal authorities’s Thrift Financial savings Plan.
The catch-up contribution restrict for workers 50 and over who take part in SIMPLE or Financial savings Incentive Match Plan for Staff stays $3,500 for 2024.
The IRS has additionally elevated revenue limits for Roth IRA contributions for 2024. The revenue phase-out vary for singles and head of family taxpayers making contributions to a Roth IRA has elevated to between $146,000 and $161,000, up from between $138,000 and $153,000. For married {couples} submitting collectively, the revenue phase-out vary is elevated to between $230,000 and $240,000, up from between $218,000 and $228,000. And the phase-out vary for married people submitting individually stays at $0 to $10,000.
Additionally growing is the revenue restrict for the Saver’s Credit score (often known as the Retirement Financial savings Contributions Credit score) for low- and moderate-income employees. For married {couples} submitting collectively the restrict goes to $76,500, up from $73,000; for heads of family, it jumps to $57,375 from $54,750; and for singles and married people submitting individually it goes to $38,250 from $36,500.