
The IRS periodically adjusts 401k contribution limits to account for inflation and cost-of-living will increase. For 2024, the contribution restrict for workers taking part in a 401k plan has elevated to $23,000 from final 12 months’s restrict of $22,500. This enhance permits workers to put aside extra pre-tax {dollars} for retirement, probably decreasing their present taxable earnings.
Moreover, for these aged 50 and older, the catch-up contribution restrict has additionally elevated, now reaching $7,000, up from $6,500 in 2023. This implies older employees can contribute a complete of $30,500 in 2024. Should you’re nearing retirement, this enhanced restrict offers a wonderful alternative to speed up your financial savings as you strategy your retirement years.