New IRA Limits for 2024

The IRS recently released updated contribution limits for 2024. Similar to last year’s increases, these adjustments are based on increased inflation and higher costs of living.

Individual Retirement Accounts (IRAs). In 2024, IRA contribution limits will increase by $500 to a total of $7,000. The total limit for those over 50 is $8,000, reflecting a catch-up contribution limit of $1,000.

Roth IRAs. For single filers and heads of households, the income phase-out range for Roth IRAs increases to $146,000-$161,000, an $8,000 increase. The phase-out for married couples filed jointly is now $230,000-$240,000, a $12,000 increase. Married individuals filing separately will continue to see their phase-out range at $0-10,000.

Workplace Retirement Accounts. Employees participating in 401(k), 403(b), 457 plans, and other similar accounts, including the government’s Thrift Savings Plan, will see a $500 increase for 2024, raising the limit to $23,000. Those over the age of 50 will still be able to contribute an additional $7,500, making their total limit $30,500.

SIMPLE Accounts. Anyone who has a SIMPLE account will see a $500 increase in their salary deferral limit, bringing this new stop to $16,000. The catch-up limit remains at $3,500.

Other Changes. The IRS also announced some additional new changes for 2024, including increases to both the annual exclusion for gifts, which will be raised $1,000 for a total of $18,000 per person, and an increase to the estate tax exclusion threshold.

Before making any changes to your tax strategy in anticipation of these new 2024 increases, consult with a tax professional to ensure you are acting in your best interest. The information provided in this update is intended for informational purposes, but you can always contact your trusted financial professional for more information about the pending changes and how they may affect you.