401(k) Contribution Limits Set to Increase in 2024

Saving for retirement through 401(k) plans is about to get even more advantageous. The IRS is projecting higher contribution limits in 2024, letting workers sock away more pre-tax or Roth money.

2024 Contribution Limits

For employees under age 50, the 2024 401(k) contribution limit is expected to rise $500 to $23,000. Those age 50 and over can add $7,500 catch-up contributions, for a total limit of $30,500.

The IRS typically adjusts limits annually based on inflation. Official 2024 numbers will be released in October 2023. 2023 limits are $22,500 for under age 50 and $30,000 with catch-up.

Benefits of Maxing Out 401(k) Contributions

Contributing up to the 401(k) limits each year can supercharge retirement savings thanks to tax-deferred compound growth. For example, maxing out for 30 years with 7% average annual returns could grow a 401(k) to over $1.5 million.

Even if unable to contribute the maximum, putting away as much as possible is wise. 401(k) matching from employers is also free money not to be missed. For help determining your ideal contribution amount, consult a financial advisor.

As 2024 approaches, employees have a prime opportunity to bulk up their retirement funds. Be sure to grab every dollar of “free money” from 401(k) matches and take advantage of higher IRS limits to supercharge your savings. Consistent max contributions over time can help build your nest egg exponentially.

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