A new way to Shield An extra $1,000 !
Hey, guess what? The IRS just tossed in a sweet bonus for folks who hate dealing with taxes on their investments! Now you can shield an extra grand while prepping for retirement.
Next year's 401(k) limit got a boost—up by 500 bucks, landing at $23,000. Same goes for IRAs, now capped at $7,000. If you're 50 or older, the catch-up contributions remain steady at $7,500 for 401(k)s and $1,000 for IRAs.
Combine those bumps, and you’ve got a cool extra $1,000 to squirrel away for your golden years. Plus, tax-deferred accounts are getting even juicier. Toss those bond buys into your tax-deferred accounts and watch the tax bill take a rain check on all that interest growth.
These contribution limits tend to creep up every year, but next year's bump is a bit modest, especially compared to the hike in 2023. Still, it’s a healthy push that could pay off big time down the road. Traditional 401(k) plans and IRAs let your contributions grow tax-free until you cash out, getting taxed at your future rate.
And hey, withdrawals from Roth IRAs and 401(k)s? Tax-free! Why? ‘Cause you made those contributions with post-tax dollars. So, these new limits are throwing more ways for investors to stash their cash.
Don’t sweat it if your job doesn’t offer a 401(k). IRAs are your friends. Plus, IRS rules say you can stash cash in both a 401(k) and an IRA, within certain limits. And guess what? 2024’s rules are even more chill for folks juggling both.
For single taxpayers in a work retirement plan, the phase-out range for deductible IRA contributions bumps up to $77,000 to $87,000 in annual income for 2024. For couples filing jointly, it's $123,000 to $143,000. More wiggle room compared to the 2023 range.
Even if you’re rolling in dough beyond those ranges, you can still park some cash in a nondeductible IRA alongside your 401(k).
So, if you’ve been dragging your feet on retirement savings, 2024’s waving a thousand more reasons to dive in. Go grab those extra savings while the getting’s good!
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