IRS released 401k and IRA contribution limits for 2024

[kimberlee]

https://www.irs.gov/newsroom/401k-limit-increases-to-23000-for-2024-ira-limit-rises-to-7000

" 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 is increased to $23,000, up from $22,500.

The limit on annual contributions to an IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2024.

The catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan remains $7,500 for 2024. Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government's Thrift Savings Plan who are 50 and older can contribute up to $30,500, starting in 2024. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024."

 

[loneliness]

@kimberlee Before anyone complains, these limits (and the amount by which they increase) are set by law. The IRS is just following the rules enacted by Congress. If you're not happy that the IRA limits are so much lower than the 401k limits, or that the DCFSA limit isn't indexed to inflation like all the others, be sure to direct your feedback to the right place: your representatives in Congress.

And because the CPI data and the formulas for inflation/cost-of-living increase are public record, that also means that other people can (and do) predict these annual changes with a high degree of accuracy before the IRS announces them. One of my favorites to check earlier in the summer for planning purposes is https://thefinancebuff.com/401k-403b-ira-contribution-limits.html

 

[ilovejeshua]

@loneliness

One of my favorites to check earlier in the summer for planning purposes is https://thefinancebuff.com/401k-403b-ira-contribution-limits.html

The streak continues!

 

[d7130]

@kimberlee All I want is numbers evenly divisible by 12.

 

[diegonat]

@d7130 Numbers evenly divisible by 12 and 26.

 

[shannonrees1]

@d7130 Same. As an employee who is paid monthly, it will be a mild pain investing $1916.67 every month with a ~$0.12 refund on my paycheck Jan 2025

 

[iam3rd]

@shannonrees1 Wouldn’t it be $0.04?

 

[piscesrising]

@d7130 Right? You would think they could consider that since most people will be putting in money this way.

 

[jbewlz]

@kimberlee The worst part is that the bi-weekly IRA contribution went from a nice and even $250 every 2 weeks to $269.23

 

[flyingturtle]

@jbewlz That’s an easy enough solve. Keep your contributions at $250 per pay-check, but on the months where you get 3 pay-checks, make number 3 a $500 contribution.

 

[jbewlz]

@flyingturtle I think my plan is just going to be making a $500 payment once at the start of the year and then keeping my payment at $250

 

[jfhodge852]

@jbewlz Can you explain what a bi-weekly IRA contribution is? I know what those words mean but there's a rule or law on the maximum amount you can contribute to an IRA in a certain interval?

 

[mandy2007]

@jfhodge852 He just contributes with each paycheck. You can fill your ira Jan 1 if you want

 

[kingskid001]

@mandy2007 Maxing J1 is supposedly best 2 of every 3 years....

.... Not any of the last 3 years though. Maybe this year will be different.

 

[intrastate108]

@jfhodge852 He's just saying that if you want to evenly contribute to your IRA on a bi-weekly basis like every paycheck then it comes out to that number. There aren't any restrictions on how often or how much you can contribute other than the yearly 6500/7000 limit.

 

[jasun]

@jfhodge852 The poster you replied to is probably just scheduling their IRA contributions to line up with their paychecks; bi-weekly = every two weeks. This is simply a personal choice, IRA contributions have no direct connection to your pay schedule.

The IRS does not care how often you add money to your IRA, or how much each one is, as long as your total amount over the entire year is within your allowed limit. You could put $6500 in as of January 1 2023 (or on December 31st 2023) and do nothing else all year. You could put $6500 / 12 = $541 per month. Or $6500 / 26 = $250 every two weeks.

 

[ugr]

@jbewlz I'm just going to deposit a lump sum on the first of the year next year so I can have even payments.

 

[chaplain]

@kimberlee Any idea about the employer max?

 

[kimberlee]

@chaplain "The limitation for defined contribution plans under section 415(c)(1)(A) is

increased in 2024 from $66,000 to $69,000."

 

[otto_alum15]

@kimberlee If you're rich you get a 5% raise in your max

If you're poor you get 2% in your max.