Be Smart About Your Savings
February 15, 2024
For a second consecutive year, there are some changes to upcoming taxes that could affect your retirement saving strategies.
Most notable is another increase to the annual amount that can be infused into IRA and 401(k) accounts. For IRAs, the contribution limit is now $7,000 (up from $6,500 last year) for those under age 50 and $8,000 (up from $7,500) for those 50 or older.1 As always, the money you invest in a traditional IRA may benefit from compounding and can grow, tax-deferred, until you withdraw it. However, the deduction you can claim on IRA contributions could be limited depending on your income level and whether you have access to a workplace retirement savings plan.
If the IRA contribution limit isn’t quite enough for what you’re willing and able to put in, a different option may be to contribute more to your workplace retirement plan, like a 401(k) or 403(b). If you don’t have access to a workplace plan, check to see if you’re eligible to open and contribute to a self-employed 401(k) or SEP IRA, each of which allows you to contribute at a level well above the IRA limitations. With inflation and markets still subject to volatility – especially in an election year – it can be challenging to determine where to save your money for purposes of potential growth or easy access. If you’re looking for a team of experienced professionals to help clarify your options and savings opportunities, contact us today and let us know how we can help.