The IRS announced they’re increasing phaseout thresholds for Roth IRA contributions in 2024.

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If you’re planning for retirement and have a high income, you may need to pay attention to the changes in the Roth IRA phase-out limits coming in 2024.

A Roth IRA is an individual retirement account that allows you to contribute after-tax income, which then grows tax-free and can be withdrawn tax-free in retirement. However, there are income limits for contributing to a Roth IRA.

For the 2023 tax year, the income limits for contributing to a Roth IRA are as follows:
– For single filers, the phase-out begins at $129,000 and ends at $144,000.
– For married filers, the phase-out begins at $204,000 and ends at $214,000.

Starting in 2024, these income limits will be increasing due to inflation. The phase-out for single filers will begin at $133,000 and end at $148,000. For married filers, the phase-out will begin at $211,000 and end at $221,000.

What this means is that if your income exceeds the upper limit of the phase-out range, you won’t be able to contribute to a Roth IRA. If you fall within the phase-out range, your contribution limit will be reduced based on your income.

For high-income earners who are near or within the phase-out range, this change may impact their retirement planning. It’s important to consider alternative retirement savings options, such as traditional IRAs, employer-sponsored retirement plans like 401(k)s, or non-deductible IRA contributions.

It’s also crucial to stay informed about these changes and to work with a financial advisor to ensure that your retirement savings strategy aligns with your financial goals.

Additionally, for those who already have a Roth IRA, these changes may not affect your ability to continue contributing, but it’s still important to stay updated on the latest income limits and retirement planning strategies.

Ultimately, the increase in Roth IRA phase-out limits for 2024 serves as a reminder for high-income earners to regularly review their retirement savings plans and make adjustments as necessary. By staying informed and proactive, you can ensure that you’re making the most of your retirement savings opportunities and preparing for a secure financial future.