As we venture into the new year, it's an opportune time to revisit your retirement savings strategy. 2024 brings updated contribution limits, allowing you to increase your savings and capitalize on the tax benefits they bring. Here are some reminders and suggestions to ensure you make the most of your retirement contributions this year.
Know the New Limits: Familiarize yourself with the updated contribution limits for retirement accounts in 2024. Whether you contribute to a 401(k), IRA, or another retirement vehicle, understanding these limits is crucial for optimizing your savings potential.
Maximize 401(k) Contributions: Take advantage of the increased contribution limits for those contributing to a 401(k). In 2024, individuals can contribute up to $20,500, with an additional catch-up contribution of $6,500 for those aged 50 and older. Adjust your contributions accordingly to take full advantage. If your employer offers a matching contribution to your retirement account, strive to contribute enough to capitalize on the full match. This is essentially free money that accelerates your retirement savings and enhances the overall growth of your portfolio.
Optimize IRA Contributions: Individual Retirement Accounts (IRAs) also see an increase in contribution limits. The limit for traditional and Roth IRAs is now $7,000, with an additional $1,000 catch-up contribution for individuals aged 50 and older.
Explore Additional Retirement Vehicles: Beyond traditional 401(k)s and IRAs, there are other retirement savings options. Health Savings Accounts (HSAs) offer unique tax advantages.
Review and Adjust Regularly: Life circumstances change, and so should your retirement savings strategy. Regularly review your financial plan with your advisor to ensure your contributions align with your goals. Adjustments may be necessary to accommodate income and expenses or if your plans change.
As you look to maximize your retirement contributions in 2024, keep in mind the long-term benefits of consistent and strategic saving. If you have questions about your contributions to determine the best combination for your circumstances, don't hesitate to contact us.
To Do: Maximizing Your Retirement Contributions: Navigating New 2024 Limits
January 04, 2024