It is that time of year again. The IRS has made updates to the contributions for 401(k) retirement savings plans. With inflation being so high this year, individuals need to increase their retirement savings distributions to be able to afford retirement in the upcoming years. Read on to learn more about the changes to Retirement savings plan contributions for 2024.
What Are the Increased 401(k) Contribution Limits for 2024?
This year, the IRS has raised the basic 401(k) contribution from $22,500 to $23,000 for the year. However, they also increased other limits to 401(k) savings plans. While the catch-up contribution limit remained the same, the annual deferred contribution limit went from $66,000 to $69,000. The annual compensation limit went from $330,000 to $345,000. Finally, the high compensated employee limit went from $150,000 to $155,000 for 2024.
Has the IRS adjusted other types of retirement savings plan contributions for 2024?
Inflation has affected everything financial. The IRS sees that people need more money for important things and is adjusting all savings vehicles appropriately. To begin, your HAS accounts will now allow you to contribute $4,150 if you are single and $8,300 is you are saving for your family. Last year, the limits were $3,850 and $7,750.
IRAs and SIMPLE IRAs are also seeing an increase. The catch-up limits across the board remain unchanged. However, the IRA contributions went from $6,500 in 2023 to $7,000 in 2024. SIMPLE IRAs also went up $500 ($15,500 to $16,000) for 2024. Finally, SERP IRA contributions went from $66,000 in 2023 to $68,000 for 2024.
Conclusion
Clearly, people need more money for retirement as inflation affects all aspects of our economy and cost of living. These retirement planning contribution changes reflect the changes in our cost of living and will help employees ensure they are saving enough for their retirement. Working with a retirement savings plan advisor can help ensure your company is compliant and employees are taking advantages of any changes to their retirement savings plan options that are available. Contact the retirement planning specialists at Retirement Plan Services Group to help you ensure your retirement savings plan options are current and offering the best opportunities for retirement savings to your employees. Call Scott Tanker at 609-922-0201 or email scott.tanker@pbsrep.com.