2023 is almost at the end of 2023. Can you believe it? For me, as well as many others — it’s been an entire year of returning to normal. It’s not as an ” new normal” as I had hoped the future would be in the pandemic, but definitely more normal than a lot of 2022 and 2021.
When I reflect back and accept these changes – in hindsightI’m also looking ahead to 2024’s future. After this year’s economic slumps as well as upwards … as well as the downs … certain things are sure to be in the news in 2024: contribution limitations! Let’s look.
RETIREMENT
If you’re saving towards financial independence with retirement savings, be sure to check the increased contribution limits.
IRAS AND ROTH IRAS
The maximums are going up! Since the year 2012, we’ve become acquainted with an limit of $6,000 for IRA or Roth IRA maximum contribution. In 2024, the limit will increase by $500, resulting in the maximum of $6,500. If you’re 50 or older by 2024, the maximum catch-up amount remains at $1,000.
401(K)S, 403(B)S, 401(A)S
Anyone who is saving money in their employer plans could be pleasantly surprised to receive yet another increase. It’s actually the biggest increase in history! If you were elated last year, knowing that the maximum limit of $19,500 for 2022 was set to increase to $20,500 by 2023, you’ll probably be delighted to find out that the 2024 maximum will increase by 22,000-$22,500.
For those who are turning 50 and better Your catch-up contributions are growing by $1,000 to $7,500. This means you’ll be able to save the equivalent of $30,000 by 2024. That’s an extra $3,000 than last year!
If you’ve received or are likely to be receiving a pay raise or cost-of-living increase to your pay Why not put the money away? This will help you stay clear of becoming a victim of lifestyle change while also bolstering your retirement savings.
SIMPLE IRAS
Not least in our compilation of the rising ceilings for retirement savings is the SIMPLE IRAs. The owners of SIMPLEs can add an additional $1,000 to their IRAs in the coming year, as the maximum limit of $14,000 for 2023 will be raised to $15,500 in 2024.
Retirement accounts aren’t all the only ones that will increase in 2024.
HEALTH SAVINGS ACCOUNTS (HSAS)
While some smart savers are making use of their HSAs as a bonus retirement savings vehicle however, everyone HSA members should be aware of the increase. Although they’re not as spectacular as the other retirement-focused contribution limits for HSA members, those who are eligible for HDHPs that have high deductibles (HDHPs) are able to increase their contributions by 2024.
Individual limits will increase by $200, ranging from the limit of $3,650 in 2023 to $3.850 in 2024. For those who have family plans, they receive a boost of $450 as they will be able to contribute $7.750 in 2024, an increase from the $7,300 cap in 2023.
For those who will be older than 55 in 2024? The catch-up limit remains $1,000.
TAKE IT TO THE LIMIT
Are you prepared to make the most of the savings you make this year? Here’s a quick guide on how to schedule your savings to meet your savings goals in 2024.
IRAS AND ROTH IRAS
If you’re not ready make a lump-sum payment at the beginning of the year, or want to make use of dollar-cost average or spread your contributions.
Under 50
To prevent the risk of over- or under-contributing only a few cents You could divide your contributions in the following manner:
$1000 contribution in January
Contributions of $500 for February through December
50 or Older
If you want to make regular contributions all year long the minimum contribution is $625 per month. This will allow you to reach the maximum.
401(K)S, 403(B)S, 401(A)S
Under 50
Monthly: $1,875 per pay period
Half-monthly (24 pay periods a calendar year): $937.50 per pay period
Biweekly (26 pay periods each the year): $865.39 per pay period
50 or Older
Monthly: $2,500 per pay period
Half-monthly (24 pay period in a year) The pay rate is $1,250 for each pay period
Weekly (26 pay periods each calendar year): $1,153.85 per pay period
SIMPLE IRAS
Under 50
Monthly: $1,166.67 per pay period
Semimonthly (24 pay period in a calendar year): $583.34 per pay period
Biweekly (26 pay periods in a the year): $538.47 per pay period
50 or Older
Monthly: $1,291.67 per pay period
Semimonthly (24 pay period in a one year): $645.84 per pay period
Biweekly (26 pay periods a calendar year): $596.16 per pay period
HEALTH SAVINGS ACCOUNT (HSAS)
Under 55: Individual
Monthly: $320.84 per pay period
Semimonthly (24 pay period in a calendar year): $160.42 per pay period
Biweekly (26 pay periods a calendar year): $148.08 per pay period
Under 55: Family
Monthly: $645.84 per pay period
Semimonthly (24 pay period in a an): $322.92 per pay period
Biweekly (26 pay periods in a the year): $298.08 per pay period
55 or Older: Individual
Monthly: $404.17 per pay period
Semimonthly (24 pay period in a one year): $202.09 per pay period
Biweekly (26 pay periods in a the year): $186.54 per pay period
55 or older Family (not taking into account your spouse’s additional contribution, if they are eligible)
Monthly: $729.17 per pay period
Semimonthly (24 pay period in a one year): $364.59 per pay period
Biweekly (26 pay periods each calendar year): $336.54 per pay period
Have you noticed the many “jumps” this year after modest increase in the past? Although they may not have you giddy but it’s always nice to be able to save more to be able to use in the future — or to get an extra tax benefit for the time being.
If we weren’t able to cover the increase you’ve been thinking about, contact us or find an appointment. We’ll help you figure out the most efficient way to contribute — and the amount — if you’re contributing to your retirement account at work during the year, or if you don’t have enough funds to meet the maximum right now.
Happy (almost) New Year!
