IRA Contribution Limit Raised to $7,000 for 2024

Wednesday, November 01, 2023

By Sarah Brenner, JD
Director of Retirement Education
Follow Us on X: @theslottreport

 

The IRS has released cost-of-living adjustments (COLAs) for 2024. Many IRA limits will increase next year.

Higher IRA Contributions

The limit on annual contributions to an IRA is increased to $7,000 for 2024, up from $6,500 in 2023. The IRA catch up contribution limit for individuals aged 50 and over was changed to now include a COLA under the SECURE 2.0 but remains $1,000 for 2024. This would allow an individual who is age 50 or older in 2024 to contribute $8.000 to an IRA.

New SECURE 2.0 COLAs

Some new additional COLAs for IRAs for 2024 made under SECURE 2.0 are as follows:

  • The limitation on contributions to qualifying longevity annuity contracts (QLACs) was raised by SECURE 2.0 to $200,000. For 2024, this limit remains $200,000.
  • For the first time qualified charitable distributions (QCDs) are indexed for inflation. For 2024, the QCD limit is increased to $105,000, up from $100,000 in 2023.
  • The limit for a one-time QCD from an IRA to a split-interest entity is increased to $53,000 for 2024, up from $50,000 for 2023.

Other IRA COLAs

The income ranges for determining eligibility to make deductible contributions to traditional IRAs, to contribute to Roth IRAs, and to claim the Saver’s Credit all increased for 2024.

The deduction for taxpayers making contributions to a traditional IRA is phased out for single individuals who are active participants in an employer plan and have adjusted gross incomes between $77,000 and $87,000, increased from between $73,000 and $83,000. For married couples filing jointly, if the spouse who makes the IRA contribution is an active participant, the income phase-out range is between $123,000 and $143,000, increased from between $116,000 and $136,000. For an individual who is not an active participant but is married to someone who is an active participant, the deduction is phased out if the couple’s income is between $230,000 and $240,000, increased from between $218,000 and $228,000.

The income phase-out range for individuals making contributions to a Roth IRA is increased to between $146,000 and $161,000 for single filers, up from between $138,000 and $153,000. For married couples filing jointly, the income phase-out range is increased to between $230,000 and $240,000, up from between $218,000 and $228,000.

The income limit for the Saver’s Credit is $76,500 for married couples filing jointly, up from $73,000; and $38,250 for singles and married individuals filing separately, up from $36,500.

The SEP contribution limit for 2024 is 25% of up to $345,000 of compensation, limited to a maximum annual contribution of $69,000.

The maximum SIMPLE IRA elective deferral is increased to $16,000 in 2024, up from $15,500 in 2023. The catch-up contribution limit for SIMPLE IRAs remains at $3,500.

More information on these and other COLAs for retirement accounts for 2024 can be found in Notice 2023-75.

 

Post Views: 108
Posted in: , , , , , , ,

Content Citation Guidelines

Below is the required verbiage that must be added to any re-branded piece from Ed Slott and Company, LLC or IRA Help, LLC. The verbiage must be used any time you take text from a piece and put it onto your own letterhead, within your newsletter, on your website, etc. Verbiage varies based on where you’re taking the content from.

Please be advised that prior to distributing re-branded content, you must send a proof to [email protected] for approval.

For white papers/other outflow pieces:

Copyright © [year of publication], [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] Reprinted with permission [Ed Slott and Company, LLC or IRA Help, LLC – depending on what it says on the original piece] takes no responsibility for the current accuracy of this information.

For charts:

Copyright © [year of publication], Ed Slott and Company, LLC Reprinted with permission Ed Slott and Company, LLC takes no responsibility for the current accuracy of this information.

For Slott Report articles:

Copyright © [year of article], Ed Slott and Company, LLC Reprinted from The Slott Report, [insert date of article], with permission. [Insert article URL] Ed Slott and Company, LLC takes no responsibility for the current accuracy of this article.

Please contact Matt Smith at [email protected] or (516) 536-8282 with any questions.