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Significant changes in the financial world

Significant changes in the financial world

December 11, 2023

Significant changes in the financial world have occurred since the government introduced the Secure Act and the Secure Act 2.0. With 2024 approaching, it may be wise to consider adjusting your contributions to your retirement plans to take advantage of the new limits allowed.

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, has been increased to $23,000 from $22,500.

For those aged 50 and above who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan, the catch-up contribution limit for 2024 remains at $7,500. This means that starting in 2024, participants can contribute up to $30,500. However, for employees 50 and over participating in SIMPLE plans, the catch-up contribution limit in 2024 remains at $3,500.

The annual contribution limit for an IRA has been increased to $7,000 from the previous limit of $6,500. According to the SECURE 2.0 Act of 2022, the IRA catch-up contribution limit for individuals aged 50 and above has been adjusted to include an annual cost-of-living adjustment. However, for 2024, the catch-up contribution limit remains $1,000.

If you have any concerns about the deductible phaseouts for contributions made to a traditional or Roth IRA, we recommend consulting with your accountant or reaching out to our office for further assistance. If you are unsure whether to choose a Roth or traditional IRA, our office can help you weigh the pros and cons of each option, or you can consult with your accountant. 

Remember that you can make your 2023 IRA contributions by the tax filing deadline, but the extension date is not included.