2024 Retirement Contribution Limits – The Latest Guide
Understanding the 2024 retirement contribution limits is essential for maximizing your savings. The IRS has updated these limits for 2024 to reflect cost-of-living increases. This guide provides a summary of the new limits and essential tips to stay compliant.
What Are the 2024 Retirement Contribution Limits?
The 2024 retirement contribution limits are the maximum amounts you can contribute to various retirement accounts, including 401(k)s, IRAs, and other qualified plans. Here are the key limits for 2024:
2024 Contribution Limits Summary
| Retirement Plan Type | Contribution Limit (Under Age 50 | Contribution (Age 50 and Over) | Total Contribution Limit (Age 50 and Over) |
| 401(k), 403(b), 457 Plans | $23,000 | $7,500 | $30,500 |
| Traditional and Roth IRAs | $7,000 | $1,000 | $8,000 |
| SIMPLE 401(k) and SIMPLE IRA | $16,000 | $3,500 | $19,500 |
| SEP IRAs | Lesser of 25% of compensation or $69,000 | N/A | N/A |
Catch-Up Contributions and Total Limits
Individuals aged 50 or older can make additional “catch-up” contributions to maximize savings. However, some employer plans may have specific rules—confirm with your plan administrator.
Total contributions to defined contribution plans (like 401(k)s) cannot exceed $69,000 ($76,500 if aged 50 or older) for 2024, including both employee and employer contributions.
Maximizing Your Retirement Savings in 2024
- Check Your Plan Eligibility: Confirm eligibility for various retirement accounts (401(k), IRA, SIMPLE IRA, SEP IRA).
- Plan for Catch-Up Contributions: If you are 50 or older, ensure your plan allows catch-up contributions.
- Monitor Contributions: Keep track of all retirement contributions to avoid exceeding IRS limits.
- Meet Required Minimum Distributions (RMDs): If 73 or older, make timely RMDs to avoid penalties.
What If You Exceed the 2024 Contribution Limits?
Exceeding contribution limits may result in penalties, including excess contribution taxes. Withdraw any excess before April 15, 2025, to avoid penalties.
Tips for Staying Within Limits
- Automate contributions to meet deadlines.
- Review contributions annually to ensure compliance.
- Consult a tax professional to optimize your strategy.
How Dimov CPA Can Help
Dimov CPA in New York provides expert guidance on maximizing retirement contributions while staying compliant with IRS rules. To learn more, contact us or visit our website.
FAQ: 2024 Retirement Contribution Limits
1. What Are the 2024 Retirement Contribution Limits for 401(k) Plans?
The 2024 contribution limit for 401(k) plans is $23,000 for individuals under 50. Those aged 50 and over can contribute an additional $7,500 as a catch-up, for a total of $30,500. This limit also applies to 403(b) and most 457 plans (IRS).
2. How Much Can I Contribute to an IRA in 2024?
For 2024, the maximum contribution to a Traditional or Roth IRA is $7,000. If you are 50 or older, you can contribute an additional $1,000 as a catch-up, making the total possible contribution $8,000 (IRS).
3. What Are the Contribution Limits for SIMPLE IRAs and SIMPLE 401(k) Plans in 2024?
The contribution limit for SIMPLE IRAs and SIMPLE 401(k) plans in 2024 is $16,000. Individuals aged 50 and over can make a catch-up contribution of $3,500, for a total of $19,500.
4. Can I Contribute to Both a 401(k) and an IRA in 2024?
Yes, you can contribute to both a 401(k) and an IRA in 2024. However, your total contributions must remain within the IRS limits for each type of account. Make sure to track your contributions to avoid exceeding these limits.
5. What Happens If I Exceed the 2024 Contribution Limits?
If you exceed the 2024 contribution limits, you may face penalties, including excess contribution taxes. It is essential to correct any excess contributions before the IRS deadline of April 15, 2025, to avoid double taxation.
6. Are Catch-Up Contributions Allowed for All Retirement Accounts in 2024?
Catch-up contributions are allowed for 401(k), 403(b), and most 457 plans, as well as IRAs, for individuals aged 50 or older. However, not all employer plans automatically allow catch-up contributions; you should check your specific plan’s rules (IRS).
7. What Is the Maximum Limit for Employer Contributions in 2024?
The total contribution limit for employer-sponsored defined contribution plans, including employer and employee contributions, is $69,000 (or $76,500 if you are aged 50 or older) for 2024.
8. How Can I Make the Most of My 2024 Retirement Contributions?
To maximize your retirement contributions in 2024:
- Take full advantage of your employer’s matching contributions.
- Utilize catch-up contributions if you are 50 or older.
- Regularly review your contributions to ensure they remain within IRS limits.
9. What Should I Do If I Am Nearing the Contribution Limits?
If you are close to exceeding your contribution limits:
- Monitor all contributions across multiple retirement accounts.
- Consult with a tax professional, like Dimov CPA in New York, to adjust your strategy accordingly.
