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retirement account Contribution Limits for 2024 – 401(k)s and IRAs

As the new year approaches, it’s important to start thinking about your retirement savings and how you can maximize your contributions to make the most of your retirement account. One of the key factors to consider is the contribution limits set by the Internal Revenue Service (IRS) for 401(k)s and IRAs. These limits determine how much you can contribute to your retirement accounts each year, and they can have a significant impact on your overall retirement savings.

For 2024, the contribution limits for 401(k)s and IRAs will see a slight increase, allowing individuals to save even more for their retirement. Let’s take a closer look at the contribution limits for both 401(k)s and IRAs for 2024.

401(k) Contribution Limits for 2024
For 2024, the contribution limits for 401(k) plans will see an increase from the previous year. The IRS has announced that the annual contribution limit for 401(k) accounts will be $21,000 for individuals under the age of 50. This is a $1,000 increase from the 2023 limit of $20,000. For individuals aged 50 and older, the catch-up contribution limit will also see a $1,000 increase, bringing the total to $6,500 for 2024.

These increased contribution limits provide individuals with the opportunity to save more for their retirement, allowing them to take advantage of the potential tax benefits and employer matching contributions that come with 401(k) plans.

IRA Contribution Limits for 2024
Individual Retirement Accounts (IRAs) will also see an increase in contribution limits for 2024. The annual contribution limit for both traditional and Roth IRAs will be $7,000 for individuals under the age of 50, up from the 2023 limit of $6,000. For individuals aged 50 and older, the catch-up contribution limit will also see a $1,000 increase, bringing the total to $1,000 for 2024.

Just like with 401(k) plans, the increased contribution limits for IRAs provide individuals with the opportunity to save more for their retirement and take advantage of the potential tax benefits that come with these accounts.

It’s important to note that these contribution limits are set by the IRS and are subject to change based on inflation and other factors. It’s also important to consult with a financial advisor to ensure that you are maximizing your retirement savings and taking advantage of all available tax benefits.

In conclusion, the contribution limits for 401(k)s and IRAs for 2024 will see a slight increase, allowing individuals to save more for their retirement. These increased limits provide an opportunity for individuals to maximize their retirement savings and take advantage of potential tax benefits. It’s essential to stay informed about these limits and make adjustments to your retirement savings plan accordingly. By doing so, you can ensure that you are on the right track to a secure and comfortable retirement.