Tis the season for planning! As you do so check out the attached report which itemizes the upcoming 2024 annual limits related to various planning vehicles such as retirement plans, 401k’s, Social Security FRA, etc. Key highlights are listed below.
Key Contribution Limit Changes & Info:
| IRA/Roth IRA Contribution Limits | $7,000 from $6,500 |
| IRA/Roth IRA Catch-Up Contribution (50+) | $1,000 (unchanged) |
| Roth IRA Income Phaseout | up to $161,000 from $153,000 (up to $240,000 from $228,000 if married) |
| 401k/403b/457 Elective Deferrals | $23,000 from $22,500 |
| 401k/403b/457 Catch-Up Contribution (50+) | $7,500 (unchanged) |
| HSA | $4,150 from $3,850 ($8,350 from $7,750 for family) |
Income Tax Brackets:
Ordinary income tax brackets will increase by roughly 5.4% across the board, and standard deductions will as well ($13,850 to $14,600 for a single filer and $27,700 to $29,200 if married filing jointly). To illustrate the impact, a married couple claiming the standard deduction in 2024 can earn $230,050 and remain in the 22% tax bracket whereas in 2023 that threshold was $218,450.
Gift and Estate Tax:
The annual gift tax exclusion, which is the amount you can give to an individual without having to file a gift tax return and potentially pay gift tax, has increased to $18,000 up from $17,000 for a single filer and $36,000 (up from $34,000) for a married couple. The estate tax exemption has increased to $13.610M from $12.920M.
Social Security:
The cost-of-living-adjustment (COLA) for 2024 Social Security benefits will be 3.2%, combined with last year’s 8.7%, those collecting Social Security will see an almost 12% increase in 2024 benefits compared to 2022.
If you have questions about how these changes might affect you and your financial plans don’t hesitate to reach out to an advisor today!
Disclaimer: HoyleCohen is a fiduciary acting on behalf of our clients. We are a fee-based investment advisor and do not receive commissions for any investment strategies or products that may be discussed. This information is intended for informational purposes only. No decisions regarding investment strategies should be made based solely on this information and it should not be interpreted as investment advice. Any investment decisions should be discussed with your Advisor. Finally, all investments carry the risk of loss, including the permanent loss of principal and past performance is not a guarantee of future results.
