IRS Increases 401(k) Contribution Limits for 2024

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IRS Increases 401(k) Contribution Limits for 2024
IRS401(K)Contribution Limits
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The IRS has announced an increase in the amount individuals can contribute to their 401(k) plans in 2024. Catch-up contributions are also getting a minor tweak. Tax-advantaged retirement accounts eliminate tax friction and help investors reach their retirement savings goals.

The IRS recently announced that the amount individuals can contribute to their 401(k) plans in 2024 has increased and catch-up contributions are getting a minor tweak. 'Tax-advantaged retirement accounts allow investors’ assets to grow without the tax friction experienced in typical brokerage accounts. It’s much like a track race,' Jonathan Lee, senior portfolio manager, U.S. Bank Wealth Management, told FOX Business. 'In this example, your contribution is the runner.

Taxes on capital gains and dividends are hurdles to finishing the race (reaching the retirement savings goal) within a desired time frame. Tax-advantaged accounts eliminate those hurdles in saving for retirement.' He explains that the 50-plus demographic has the added benefit of contributing more of their money to tax-advantaged accounts as retirement gets closer. According to Lee, to quantify the 'catch-up' benefit for an IRA, the additional $1,000, contributed annually, growing at an assumed 7% rate year-over-year, results in an additional $5,75

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IRS 401(K) Contribution Limits Retirement Accounts Tax-Advantaged Catch-Up Contributions

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