Broker Check

Saint Cloud Office

1411 West St. Germain Street,

Suite 250
St. Cloud, MN 56301
IRS Changes for 2024

IRS Changes for 2024

November 27, 2023

As we turn the calendar to December, we are reminded that investing is very personalized.  For our clients who are still working, it is important to continue to save and consider the long-term investment time horizon.  Maximizing savings, or in the absence of being about to do that, increasing your automatic savings within your retirement plan or investments are important steps to working towards a successful financial future. 

Retirees:

The Social Security Administration has announced a 3.2% Cost of Living Adjustment for 2024. This adjustment means the average Social Security retiree beneficiary will see their monthly check increase by about $57 to $1,849, though individual benefits may vary.

This increase is calculated by comparing the third quarter Consumer Price Index against that of the previous year.

Still working?

The Internal Revenue Service has released new contribution limits for the coming year. After months of high inflation and financial uncertainty, some of these cost-of-living-based adjustments have reached near-record levels.

Contribution Limits for IRA & Roth IRA
IRA & Roth IRA contribution limits are going up $500 for 2024.

 

IRA Contribution Limits

Catch-Up (over age 50)

2023

$6,500

$7,500

2024

$7,000

$8,000

***Reminder: You can contribute to your IRA/Roth IRA for a particular tax year up until the tax filing deadline for that year, excluding extensions. The regular deadline is usually April 15th of the following year. For example, contributions for the 2023 tax year can be made until April 15, 2024.

Roth IRAs
The income phase-out range for Roth IRA contributions increases to $146,000-$161,000 for single filers and heads of household, an $8,000 increase. For married couples filing jointly, the phase-out will be $230,000 to $240,000, a $12,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.

Traditional vs. Roth IRA – which might be right for you?

Workplace Retirement Accounts
Those with 401(k), 403(b), 457 plans, and similar accounts will see a $500 increase for 2024, the limit rising to $23,000. Those aged 50 and older will now have the ability to contribute an extra $7,500, bringing their total limit to $30,500.

SIMPLE Accounts
A $500 increase for 2024 gives individuals contributing to this incentive match plan a $16,000 stoplight. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2024.

Keep in mind that we provide updates for informational purposes only, so consult with your tax professional before making any changes in anticipation of the new 2024 levels. You can also contact our office, and we can provide you with information about the pending changes and how to make adjustments.