Learn About the Investment Changes for Retirement Savings in 2024
The cost of living has risen exponentially. The Federal Reserve has hiked the interest raes to help slow inflation. Yet, inflation has only slightly begun to slow. Therefore, retirement planning must adjust. Inflation has allowed the retirement savings investments to go up from 2023. Read on to learn more about the changes that you will see in retirement savings planning laws after the start of the new year.
The New 401(k) Investment Limits
Under the changes for retirement savings plans for 2024 are new investment limits. In 2023, employees were allowed to invest up to $22,500 for the year. In 2024, the limit has risen to $23,000 for the year. If you are over 50 and wish to make a catch-up contribution, the limit is still $7,500 for the year, allowing employees over 50 to invest a total of $30,500.
The New 401(k) Deferment Limits
In 2023, employees could tax-defer up to $66,000 when employers match contributions or profit sharing is involved. However, in 2024, these tax-deferred limits have increased to $69,000. If an employee is over 50 years old, they can have $76,500 of tax-deferred investments once they add in their $7,500 catch-up contribution.
Conclusion
As the cost of living continues to increase, it makes sense that employees would need more money in retirement. Therefore, the IRS has seen fit to increase the contributions allowed and the tax-deferred limits to employer sponsored 401(k) plans for 2024. A qualified retirement savings plan advisor can help you understand what the increases mean for both employees and employers and ensure employees understand the changes and how to best utilize them. Contact the retirement planning specialists at Retirement Plan Services Group to help you develop a retirement savings planning program that fits the needs of all of your employees. Call Scott Tanker at 609-922-0201 or email scott.tanker@pbsrep.com.