New Contribution Limits and Other Changes for 2024

New Contribution Limits and Other Changes for 2024

December 07, 2023

Contribution limits for many tax-advantaged savings vehicles are indexed for inflation.  With inflation stuck above the Fed’s long-term target for the past year, most contribution limits have increased for 2024:

  • Workplace retirement plans including 401(k), 403(b), most 457 plans and Thrift Savings Plans: $23,000 plus $7,500 catch-up for those age 50 and older
  • IRAs: $7,000 plus $1,000 catch-up for those age 50 and older
    • The adjusted gross income phaseout range for direct Roth IRA contributions is $146,000 to $161,000 for single filers and $230,000 and $240,000 for married couples filing together.
  • SIMPLE IRA: $16,000 plus $3,500 catch-up for those age 50 and older
  • Defined contribution plan: $69,000
  • Health Savings Accounts: $4,150 (single plan); $8,300 (family plan) plus $1,000 catch-up for those age 55 and older

If you wish to maximize your savings opportunities, be sure to update your contribution amounts effective January 1, 2024.  If you use payroll deduction to make your contributions, be sure to update your payroll deduction amounts prior to your first paycheck of 2024. Check with your Human Resources or payroll department for deadlines.

A few other changes to note for 2024:

  • Edvest (the Wisconsin 529 College Savings Plan) contributions up to $4,000 per beneficiary (for single filers or married filing jointly) are eligible for a Wisconsin income tax deduction ($2,000 per beneficiary for married filing separately and certain divorced parents).
  • The aggregate amount of Qualified Charitable Distributions (QCD) that are not includible in gross income has increased to $105,000.
  • The annual exclusion amount for gifting increases to $18,000 per person.
  • Social Security benefits will be increased by 3.2% effective for payments beginning in January.
  • Medicare Part B premiums will be increased to $174.70 per month.

We wish you and your families a happy holiday season!

The views expressed represent an assessment at a specific point in time, are opinions only and should not be relied upon as investment advice regarding investments, strategies, sectors or markets in general. 

 The above commentary has been obtained from sources we believe are reliable, but we cannot guarantee their accuracy or completeness.  Past performance is no guarantee of future results.  This is not a complete analysis of every material fact.  All expressions of opinion are subject to change without notice.

 The information contained in this document does not constitute the rendering of legal, accounting, or other professional advice or opinions on specific facts or matters.  Talk to your financial advisor before acting on information in this document.