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We have engaged Forvis Mazars, LLP (Attn: Bud Hollenkamp, 1801 California Street, Ste. 2900, Denver, CO 80202) to perform member verifications. Kindly compare the balance of your accounts on your September 2024 statement WITH YOUR RECORDS. If balances do not agree, please address your discrepancies directly to Forvis Mazars, LLP. Include your name, truncated account number, and an explanation of the difference noted. A reply is not considered necessary unless a difference is noted.
ROUTING NUMBER: 307070050
By Kirtland Financial Services
Life today is expensive, and contributing to a retirement plan is more beneficial than ever. Recently, the IRS announced it was raising the contribution limit for 401(k)s to $23,000 for 2024, up from $22,500. In a world where pensions are nearly gone, having the ability to put more money away can help you prepare for a retirement that may be here faster than you think.
According to the Investment Company Institute, Americans had more than $7 trillion in 401(k)s and $13 trillion in individual retirement accounts (IRAs) in the second quarter of 2023, and only about half of Americans had any retirement funds saved up at all. Were you one of them? How will the new changes impact you?
If you are somebody who is building not only a 401(k) but a 403(b), one of several 457 plans, or you are eligible for the federal government’s Thrift Saving Plan, the limit on elective deferrals for 2024 will also grow to $23,000, about a 2% increase from last year.
For individuals age 50 or older, you will be allowed a “catch-up contribution,” an additional $7,500 for a total of $30,500.
IRA contribution limits also increase $500 for 2024 to a limit of $7,000 ($6,500 in 2023) and to $8,000 for those age 50 or older.
A Roth IRA requires you to pay income tax on your contributions the year you make them, but any withdrawals at retirement or before retirement (if eligible) will be tax-free. The rules are as follows:
Low- and moderate-income households may get help from the saver’s credit, which pays up to $1,000 for individuals and up to $2,000 for married couples, depending on income and contribution amounts. As of 2024, if you are single, to qualify, your income must be below $38,250. Head of household must be less than $57,375 and below $76,500 if you are married filing jointly.
SIMPLE Retirement Accounts Limit:
Defined Benefit Plan Limit:
The limitation on the annual benefit under a defined benefit plan climbed to $275,000. Suppose you are a participant who separated from service before January 1, 2024. In that case, your limitation under a defined benefit plan can be calculated by multiplying your compensation limit, adjusted through 2023, by 1.0351.
Defined Contribution Plan Limit:
The total contribution limit for employee and employer contributions to 401(k) defined contribution plans has increased to $69,000 for 2024.
Staying up-to-date on changes to contribution limits could benefit you and your retirement strategy. Make 2024 the year you take control of your finances. Schedule a consultation with your financial professional and see how these new changes could impact your financial goals.
Sources:
You can save up to $23,000 in your 401(k) next year, IRS says | Morningstar
Roth IRA Contribution and Income Limits 2023-2024 – NerdWallet
IRS increases retirement account contribution limits (kxlh.com)
This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal or investment advice. To determine which investment(s) may be appropriate for you, consult your financial professional prior to investing.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Traditional IRA account owners should consider the tax ramifications, age and income restrictions in regards to executing a conversion from a Traditional IRA to a Roth IRA. The converted amount is generally subject to income taxation.
All information is believed to be from reliable sources; however, LPL Financial makes no representation as to its completeness or accuracy.
This article was prepared by LPL Marketing Solutions
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Routing Number: 307070050
6440 Gibson Blvd. SE, Albuquerque, NM 87108
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