401(k) Contribution Limits Raised for 2024

The IRS also announced higher income phase-out limits for traditional and Roth individual retirement accounts.

By Rethinking65

The amount individuals can contribute to their 401(k) plans in 2024 has increased to $23,000, up from $22,500 for 2023, the IRS announced.

The IRS also noted on Nov. 1 that the annual contributions to an individual retirement account increased to $7,000, up from $6,500. IRA catch-up contribution for individuals age 50 and over remains $1,000 for 2024.

In 401(k), 403(b), and most 457 plans, the catch-up contribution limit for employees aged 50 and over remains $7,500 for 2024. Those 50-and-older participants can contribute up to $30,500 next year. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.

The IRS also announced that the income ranges for determining eligibility to make deductible contributions in 2024 to traditional and Roth IRAs, as well as to claim the Saver’s Credit, all increased as a result of cost of living adjustments.

2024 Traditional IRA income limits

• For single taxpayers covered by a workplace retirement plan, the phase-out range is increasing to between $77,000 and $87,000, up from between $73,000 and $83,000.
• For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range will be between $123,000 and $143,000, up from between $116,000 and $136,000.
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.

2024 Roth IRA income limits

• For singles and heads of household contributing to a Roth IRA, the phase-out range is increased to between $146,000 and $161,000, up from between $138,000 and $153,000.
•For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.
• The phase-out range for a married individual filing a separate return remains between $0 and $10,000.

2024 Saver’s Credit income limits

• The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers is $76,500 for married couples filing jointly, up from $73,000.
• For heads of households, it’s $57,375, up from $54,750.
• For singles and married individuals filing separately, it’s $38,250 up from $36,500.

Other changes

• The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from $15,500.
• The deductible limit on charitable distributions is increased to $105,000, up from $100,000.
• The deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity increased to $53,000, up from $50,000.

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