New Retirement Account Contribution Limits for 2024

Peter, good to see you. We're talking through the new retirement account contribution limits for 2024. The IRS recently announced that we'll be able to sock away a lot more money for retirement starting in 2024. These increases are of course in line with an increased cost of living. So let's break down those changes and how we should prioritize saving for retirement. So of course, generally the most accessible funds, 401ks and IRAs, those contribution limits have increased. Yeah, they've gone up a little bit and we do appreciate that.

Mostly about $500. The under 50 crowd could save $22,500. Now that's $23,000. The over 50 crowd got a bump as well. But the base contributions went up.

The catch up contributions did not. But we want to take advantage of every opportunity that we can to save as much as possible. And when we see these contribution limits, how much we can save in these tax advantage, tax qualified accounts increase. Something to pay attention to because making the most of your future is about planning and being proactive. So these are one place where we can sort of see ahead a little bit and plan accordingly. And I know you love Roth accounts.

And so this is an interesting change. More of us are going to qualify for Roth accounts. Yeah, because the income limits and limitations there went up the threshold for how much you can make before you are income eliminated from being able to get dollars into a Roth. However, I will also say, Aaron, there's really not a situation where you can not get dollars into a Roth. This was a place where, yes, the tax code stated one thing, but they also had a little bit of an end around that more savvy planners and investors have always taken advantage of since the Roth's been in inception. And the IRS has legitimized what's called a back door Roth conversion or just Roth conversions all along the way.

So, yes, there is that limit and limitation, but there are ways to get money into a Roth regardless of your income situation and even if you well exceed these limits and limitations. Simple account contributions have also increased? Yeah, there are a couple of kind of one off accounts that don't apply to a lot of people. But if you are basically a member of a smaller employer or a solopreneur, you may have like a SEP IRA or a simple IRA. They try to keep the contribution limits of those plans in line with what you could contribute elsewhere.

So those limits also went up. And then health care savings accounts, HSAs, FSAs, we have the opportunity to take advantage of those as well and probably should. So as you mentioned, HSAs uniquely triple tax advantage.

Those contributions have gone up as well. So this is when we get to the million dollar question, Peter, how do we prioritize our retirement savings? Well, I think you need to sit down and look at all of your options. And it's very situational specific. I mean, for some people, the best place they could put money might be paying off debt or high interest credit cards. For other people, the best place they could put money might be to put it in the bank and build up their emergency account. If you have those taken care of and you are on turning the corner into building wealth and investing and accumulating, you know, the best place you may put money is situational and specific. I do have a general order of operations, which is capture any match that's on the table and then fully fund Roth where possible. That alone takes some crunching of numbers, because if you're earning significantly higher now than what you're estimating or projecting out your retirement expenses are going to be, then maybe Roth is the best thing, maybe not. We need to look at that. But capture the match, max the Roth, then you can go back and max out other retirement savings opportunities.

But again, and HSAs and FSAs and health care expenses need to be mixed in as well. Again, very situational, specific, and really crunching the numbers to optimize how you are deploying your dollars, where you're placing them to get the most out of them. Right.

Really interesting. And like you said, there's no cookie cutter answer. So if somebody wants to figure out what's best for them, how can they reach you with questions? Yeah, give us a call. We are always happy to sit down and look at how your money is working for you. You've worked very hard for it.

You want it to do the best job for you as possible in achieving your goals and on your timeline. So give us a call for that optimized retirement plan. 919-300-5886. The number to call 919-300-5886. You can email me, Peter, at rashanplanning.com. You can go online.

It looks like richonplanning.com, rashanplanning.com. All right, Peter, thank you. Thank you. And we always appreciate everybody who likes, subscribes, shares this information. We appreciate the comments and questions that we get. Always helpful. Thank you.

Absolutely. Thanks, Peter. Hey, everyone.

Peter Rashan here. Hope you enjoy the content. As always, make sure that you like, subscribe, share the videos with others that may find this information helpful. And as always, you're welcome to be in touch or to submit questions or comments. You can comment below the video anything that you'd like to see or hear shared on our YouTube channel and in future videos. If you've got a topic that you've been thinking about or is of concern for you financially, be sure to let us know. We'd love to help you by discussing it on the channel. So appreciate the continued views and the likes and the subscribes, the shares, the comments. Always helpful. We look forward to getting you the information that you need.

This has been Planning Matters Radio. The content of this radio show is provided for informational purposes only and is not a solicitation or recommendation of any investment strategy. You are encouraged to seek investment, tax or legal advice from an independent professional advisor. Any investments and or investment strategies mentioned involve risk, including the possible loss of principal advisory services offered through Brooke's own capital management, a registered investment advisor, fiduciary duty extends solely to investment advisory advice and does not extend to other activities such as insurance or broker dealer services. Advisory clients are charged a quarterly fee for assets under management while insurance products pay a commission which may result in a conflict of interest regarding compensation.