The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan….(read more)

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Are you a savvy investor or just starting out in the world of retirement savings? If so, then it’s time to test your knowledge on the elective deferral limits for various retirement savings plans for the year 2024. The 401k, TSP, 403b, and 457 plans are common options for individuals to save for their retirement, and understanding the elective deferral limits is crucial for maximizing your savings potential.

For those who may not be familiar with the term, elective deferrals refer to the money that an employee chooses to contribute to their retirement plan from their paycheck before taxes are taken out. This allows the funds to grow tax-deferred until withdrawal during retirement. The maximum amount an individual can contribute each year to these retirement plans is determined by the IRS and is subject to change annually.

The challenge for 2024 is to test your knowledge on these elective deferral limits and see if you are up to date with the latest regulations. So, let’s dive into the numbers:

For the 401k plan, the elective deferral limit for 2024 is set at $20,500, an increase of $1,000 from the previous year. This means that individuals under the age of 50 can contribute up to $20,500 to their 401k plan in 2024.

For those age 50 and over, the catch-up contribution limit remains unchanged at $6,500. This allows individuals in this age group to contribute an additional $6,500 on top of the regular elective deferral limit, bringing their total contribution limit to $27,000 for 2024.

Moving on to the TSP (Thrift Savings Plan), the elective deferral limit for 2024 mirrors that of the 401k plan at $20,500. This is significant for federal employees and members of the uniformed services who participate in the TSP.

When it comes to the 403b plan, the elective deferral limit for 2024 is also set at $20,500, aligning with the 401k and TSP limits. This allows employees of certain tax-exempt organizations, public school systems, and ministers to contribute up to this amount to their retirement savings plan.

Lastly, for the 457 plan, which is available to state and local government employees, the elective deferral limit for 2024 is $20,500, again in line with the other retirement plans mentioned.

Now that you are familiar with the elective deferral limits for the 401k, TSP, 403b, and 457 plans for 2024, it’s time to put your knowledge to the test. Are you up for the challenge of maximizing your retirement savings potential by contributing the maximum allowable amount to your chosen retirement plan? Understanding and staying informed about these limits is crucial for ensuring you are making the most of your retirement savings opportunities.

So, whether you’re a seasoned investor or just starting out, take the 401k, TSP, 403b, and 457 Elective Deferral Limit for 2024 Challenge and see how well you fare! By staying informed and contributing the maximum allowed amount to your retirement plan, you can set yourself up for a secure and comfortable retirement in the future.