401K and IRA Contribution Limits

December 27, 2023

With the end of 2023 closing in a few days, I hope you have already taken advantage of your 401K or IRA contributions. These can be deposited BEFORE tax and reduce your tax liability (depending on the type of retirement account you have). If you are doing this, you can contribute up to $22,500 in 2023 to a 401K or up to $6,500 into an IRA. Depending on your tax bracket, you could save around $11,000 in taxes by taking advantage of these contribution limits.


For 2024 the rules are changing. The Internal Revenue Service (IRS) has recently announced an important update regarding 401(k) plans. Starting in 2024, individuals will be able to contribute up to $23,000 to their 401(k) accounts. This marks an increase from the previous contribution limit of $22,500 in 2023.

This news holds significant implications for individuals who have or are planning to have a 401(k) plan. It presents an opportunity to save more towards retirement and take advantage of potential tax benefits. By maximizing your contributions to your 401(k), you can potentially grow your retirement savings faster and ensure a more secure financial future.


It is crucial for individuals to take note of this change and adjust their financial plans accordingly. If you currently contribute less than the new limit or have not yet started contributing to a 401(k), now is the perfect time to review your retirement savings strategy.


Consider consulting with a financial advisor who can provide guidance on how best to leverage this increased contribution limit. They can help you understand the potential impact on your overall financial goals and develop a personalized plan that aligns with your needs.


Remember that taking advantage of employer matching contributions can further enhance the benefits of contributing to a 401(k). Be sure to review your employer's matching policy and aim to contribute at least enough to receive the maximum match offered.


In conclusion, the increased contribution limit for 2024 presents an opportunity for individuals to boost their retirement savings through their 401(k) plans. By taking proactive steps and making informed decisions about saving for retirement, you can work towards achieving long-term financial security and peace of mind.


Please reach out to us if you’d like help navigating your tax implications and planning.


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