January is a good time to assess whether you can increase your level of retirement plan contributions for the upcoming year. If you are self-employed, you may still have time to setup and fund a plan for the prior calendar year through your tax-filing deadline. Some limits have increased for 2024 while others have remained the same as 2023.
2024 Retirement Plan Contribution Limits
| Plan Type | Contribution Limit |
| 401(k), 403(b), 457(b), Roth 401(k) plans, elective deferral limit (under age 50) | $23,000 |
| 401(k), 403(b), 457(b), Roth 401(k) plans, elective deferral limit (age 50 and older) | $30,500 |
| Limit on additions to defined contribution plans (under age 50) | $69,000 |
| Limit on additions to defined contribution plans (age 50 and older) | $76,500 |
| SIMPLE IRA elective deferral (under age 50) | $16,000 |
| SIMPLE IRA elective deferral (age 50 and older) | $19,500 |
| Annual benefit limit on defined benefit plans | $275,000 |
2024 Individual Retirement Account (IRA) Contribution Limits
| IRA / Roth IRA (under age 50) | $7,000 |
| IRA / Roth IRA (age 50 and older) | $8,000 |
A Roth IRA is often an ideal retirement account to consistently fund due to its tax-free growth and ability to withdraw funds without taxes after being opened for at least 5 years and reaching age 59 ½. In most cases, if you are eligible to fund a Roth IRA, you should do so. This type of account can still be funded for 2023 up until the tax filing deadline, however there are income limits. If your income exceeds the limits to fund a Roth IRA directly, a backdoor Roth IRA may be an option for you.
2024 Phase-out of Roth IRA Contribution Eligibility (Modified Adjusted Gross Income)
| Single | $146,000 – $161,000 |
| Married Filing Jointly | $230,000 – $240,000 |
| Married Filing Separately | $0 – $10,000 |
Although not a retirement account, a health savings account can provide a current tax deduction, tax-free growth, and the ability to withdraw funds for medical expenses tax-free. If you have a high deductible health insurance plan that allows you to fund an HSA, you should consider doing so. HSAs can also be funded for 2023 up until your tax filing deadline. 2024 limits have increased slightly.
2024 Health Savings Account Contribution Limits (HSA)
| HSA contribution individual coverage | $4,150 |
| HSA contribution family coverage | $8,300 |
Maximizing your contributions to and ensuring your investments are held in the most tax advantaged accounts available to you is important planning. Be sure to discuss these topics with your tax advisor, and if you have questions, feel free to get in touch.
