Inflation's Silver Lining
Is there any good news from all this inflation that we recently experienced? There may be a couple..
INCREASED RETIREMENT ACCOUNT CONTRIBUTION LIMITS in 2024
Contribution limits for 401(k), 403(b), and most 457 plans, as well as Thrift Savings Plan is increased to $23,000, up from $22,500. Catch-up contribution for those aged 50 $7,500 for 2024.
Annual contributions to an IRA or Roth IRA increased to $7,000, up from $6,500. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000.
Contribute to a SEP or Solo 401k? These limits have gone up as well. For 2024 these limits have gone up to $69,000, up from $66,000. Over the age of 50, there is still a catch up of $7,500.
*Individual contribution limits are subject to compensation.
ACTION ITEMS:
Look at your Employer Sponsored retirement account and set your increases to start Jan 2024 so you don’t miss the opportunity to max out.
Shoot you advisor an email so they can increase your IRA contributions starting Jan 1 so you can max out for 2024 systematically.
Maxing out your IRA? Let's adjust as follows:
Under 50 years old = $583/month (or $134/weekly) contribution
50 and over = $665/month (or $153/weekly) contribution
BEST BANK RATES IN YEARS
We haven’t seen interest rates this high in a long time and the most recent federal fund rate was targeted to 5.25-5.5%. While it makes navigating the a new mortgage tricky, it also means that cash on the sidelines is finally making something. Make sure to take full advantage of the higher rates offered through some banks right now, and remember that not all bank rates are created equally.
ACTION ITEMS:
Confirm the interest rate on your savings accounts
If you find that your rate is below average, then you can open a High Yield savings and transfer the money OR contact your advisor to a recommendation.
Written by Laurie Allen