These are the 2024 retirement account contribution limits for 401(k) plans and IRAs
Investment contribution limits for all retirement plans will receive an increase in 2024 to keep up with inflationary pressures.
Changes are coming in 2024 for your future retirement investments. The Internal Revenue Service (IRS) adjusts contribution limits for retirement plans each year for several reasons, primarily to account for changes in the cost of living and to encourage individuals to save for their retirement.
Over time, the purchasing power of a dollar decreases due to inflation. By increasing contribution limits, the IRS ensures that the real value of contributions remains relatively constant, allowing individuals to save enough for retirement despite rising prices.
These limits affect both 401(k) and Roth IRAs.
Changes to IRA accounts
Announced on Wednesday, people saving in a traditional or Roth IRA the 2024 limit on contributions rises to $7,000 next year, a $500 increase. If you are contributing to either plan and you are over 50 years old then the catch-up controbution remains unchanged from 2023.
Contributions to an IRA may be tax deductible if your modified adjusted gross income (MAGI) is under a certain limit. For single, head of household or qualifying widow(er) this limit is $73,000 then any contributions are tax deductible. Between $73,000 and $83,000 there is a partial deductible and deductions over $83,000 there is no deduction.
What about 401(k) investment plans?
The IRS will increase the contribution limit by $500 to $23,000 for 2024. Workers who are saving for retirement with 401(k), 403(b), most 457 plans, and the Thrift Savings Plan can contribute up to $23,000 to those plans in 2023.
Participants in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $30,500.