From— By Adam Palasciano —

With 2024 already underway, some substantial changes to retirement plans are in effect. These modifications could significantly impact your financial strategies.

Maybe you were considering retiring early, but the new options for saving more might make you reconsider.

Here’s a breakdown of 15 key alterations that went into effect this year, including increased contribution limits and adjustments to income phase-out ranges.

Retirement plan limits are up

The contribution limits for 401(k), 403(b), 457 plans, and the federal government’s Thrift Savings Plan are set this year at $23,000, up from $22,500 in 2023.

This opens new avenues for individuals to engage in tax-advantaged retirement savings and reinforces the capacity to build wealth for the future.

This increase in limits not only allows for expanded contributions but serves as an opportunity to maximize tax-advantaged savings.

Increased limit on annual IRA contributions

This year, the limit on annual contributions to an IRA stepped up to $7,000 from the previous $6,500, accompanied by an additional catch-up contribution limit of $1,000 for individuals 50 and older.

This increase presents a golden opportunity for older individuals to fortify their IRA savings, providing an added layer of security to their retirement nest egg.

Catch-up contribution limits for 401(k) and similar plans

If you’re 50 and older and participating in 401(k), 403(b), and most 457 plans, here’s some news: The catch-up contribution limit remains at $7,500 for 2024.

This allows you to contribute up to $30,500. At the same time, the catch-up contribution limit for employees 50 and older who participate in SIMPLE plans remains $3,500 for 2024.

Phase-out range adjustments for workplace retirement plan contributions

The phase-out range for singles with workplace retirement plans increased to between $77,000 and $87,000, up from between $73,000 and $83,000.

That means more people might now qualify for tax-saving opportunities, turning your higher income into potential tax advantages.

Individuals in higher income brackets can still enjoy the benefits of tax advantages, but this adjustment means that even more people might now be eligible for these tax-saving opportunities.

Phase-out range changes for IRA contributions

For married couples filing jointly, if the contributing spouse is covered by a workplace retirement plan, the phase-out range now stands between $123,000 and $143,000, up from the previous $116,000 to $136,000.

Couples can now optimize their tax strategies by contributing to IRAs, taking advantage of the updated phase-out range, and making the most of potential tax benefits.

IRA contributions for non-covered spouses

For an IRA contributor married to someone covered by a workplace retirement plan, the phase-out range is now $230,000 to $240,000, an increase from the previous range of $218,000 to $228,000.

Couples can continue diversifying their retirement savings, making the most of potential tax benefits within the adjusted phase-out range.

Changes for married individuals filing separately

The phase-out range for a married individual filing a separate return covered by a workplace retirement plan remains between $0 and $10,000 and is not subject to an annual cost of living adjustment.

This range allows for some contribution benefits for married individuals filing separately, catering to unique financial situations.

Increased income phase-out range for Roth IRA contributions

The income phase-out range for individual taxpayers making contributions to a Roth IRA is now between $146,000 and $161,000 for singles and heads of household, up from the previous $138,000 to $153,000.

The expanded income range enables more individuals to contribute to Roth IRAs, offering tax-free growth potential in retirement.

Changes in income phase-out range for married couples

For married couples filing jointly, the income phase-out range for Roth IRA contributions is increased to between $230,000 and $240,000, up from the previous $218,000 to $228,000.

Also, the phase-out range for a married individual filing a separate return who contributes to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

Changes in income limit for the Saver’s Credit

Also known as the Retirement Savings Contributions Credit, the income limit for the Saver’s Credit (designated for workers with low and moderate incomes) is increased to $76,500 for married couples filing jointly, up from $73,000.

The limit is $57,375 for heads of household, up from $54,750, and $38,250 for singles and married individuals filing separately, up from $36,500.

Workers with lower and moderate incomes can now enjoy increased Saver’s Credit benefits, encouraging more individuals to save for retirement.

Enhanced contribution limits for SIMPLE retirement accounts

The amount individuals can contribute to their SIMPLE retirement accounts is increased to $16,000, up from the previous $15,500.

This boost in contribution limits allows individuals covered by SIMPLE plans to accelerate their savings and build a more robust retirement fund and a brighter financial future for themselves.

Qualifying longevity annuity contract limitations

Under the Secure 2.0 Act, the limitation on premiums paid for qualifying longevity annuity contracts remains at $200,000 for 2024.

This limitation ensures that individuals can strategically incorporate longevity annuities into their retirement plans without exceeding a specified premium amount.

Deductible limit adjustment on charitable distributions

The Secure 2.0 Act introduced the deductible limit on charitable distributions, which increased to $105,000 for 2024 from $100,000.

This adjustment offers individuals greater flexibility in making charitable contributions directly from their retirement accounts, potentially optimizing their tax positions and doing some good at the same time.

Deductible limit for a one-time election on IRA distributions to split-interest entities

Also, under the Secure 2.0 Act, the deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to other entities increased to $53,000 for 2024, up from $50,000.

This adjustment provides additional options for charitable giving, allowing individuals to make strategic decisions about their IRA distributions to benefit split-interest entities.

Bottom line for retirement contributions

As you navigate these new changes to retirement plans, it’s crucial to assess how they align with your financial goals and retirement strategy.

Are you capitalizing on heightened contribution limits? Have you contemplated adjustments to your income and Roth IRA contributions?

Reflecting on these modifications can help fine-tune your retirement plan. Remember, the more you save today, the better positioned you’ll be to retire comfortably tomorrow.

Contact Kleshinski, Morris & Morrison CPAs

If you need help with your taxes, or any type of professional accounting services, contact the experts at Kleshinski, Morrison & Morris CPAs. Reach us by phone at 419-756-3211, email to, or by filling out the contact form on this website here.

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