On November 1, the IRS announced the much-anticipated 2024 contribution limits for retirement plans and other tax-advantaged savings plans. Thankfully, most limits were raised from 2023 numbers, making it possible for Americans to save more to secure a successful retirement future.
Without further ado—we’ll jump right into the 2024 contribution limits for IRAs, solo 401(k)s, education savings accounts (ESAs), and health savings accounts (HSAs). And remember, these changes apply to self-directed plans just as they do conventional retirement and savings plans.
2024 Contribution Limits for Retirement and Other Savings Plans
Traditional and Roth IRAs
Traditional and Roth IRAs are plans for individuals who don’t have workplace retirement benefits or want to supplement retirement saving potential (within allowable limits if they also participate in workplace plans).
Contributions to traditional IRAs are made with pre-taxed earnings. Your distributions in retirement are taxed, but you may qualify for tax deductions on contributions to your plan.
Roth IRA contributions are post-tax dollars, so you don’t owe tax on distributions when you retire. However, you’re unable to deduct contributions on your income tax return.
- Annual contribution limits for both traditional and Roth IRAs increased to $7,000 in 2024 (up from $6,500 in 2023).
- Catch-up contributions remain at $1,000 for ages 50 and older.
Roth IRA eligibility income requirements were raised for 2024, allowing more people to contribute to Roth accounts.
- For single individuals and heads of household, adjusted gross income (AGI) limit for 2024 is between $146,000 and $161,000 (up from between $138,000 and $153,000 in 2023).
- And for married couples filing jointly, the 2024 AGI is between $230,000 and $240,000 in 2024 (up from between $218,000 and $228,000 in 2023).
The 401(k) allows for both employee and employer contributions. The same is true for solo 401(k) plans for small business owners and the self-employed who have no employees other than themselves or business partners. The employer’s profit-sharing contribution is up to 25 percent of an employee’s compensation.
- Annual contribution limit in 2024 for employees is $23,000 (up from $22,500 in 2023).
- Catch-up contribution limit in 2024 remains $7,500 for employees aged 50 and over for 401(k). For this age group, the 2024 total contribution limit is $30,500.
- Total limit for employee plus employer contributions for those under 50 is $69,000.
- The combined employee and employer contribution limit for those 50 and over is $76,500.
Savings Incentive Match Plan for Employees (SIMPLE IRAs) for small business owners and the self-employed allow you to contribute as both an employer and an employee.
- Annual limit increased to $16,000 (from $15,500 in 2023).
- Catch-up contribution limit for employees 50 and over remains $3,500 for 2024.
- The SECURE Act 2.0 made provisions for Roth contributions beginning in 2023.
Simplified Employee Pensions (SEP IRAs) for the self-employed and businesses with few employees offer much higher annual contributions than other IRAs.
- Contribution limit in 2024 is the lesser of 25 percent (of the first $345,000 of compensation) OR $69,000.
- This plan does not allow catch-up contributions.
- The SECURE Act 2.0 allows Roth treatment of employer and employee contributions.
Health Savings Account (HSA)
The 2024 contribution limits for health savings accounts (HSAs) are significant. Keep in mind you must participate in a high-deductible health insurance plan to contribute to an HSA.
- Self-only account limit is $4,150 in 2024 (up from $3,850 in 2023).
- Family account limit is $8,300 in 2024 (up from $7,750 in 2023).
- Catch-up contribution limit for in 2024 is $1,000 (per person if married) for those 55 and older.
Education Savings Account (ESA)
ESAs are an alternative to 529 plans, allowing families to build tax-sheltered income to pay for qualified education expenses for both lower-level and higher-level education.
- Contribution limits for ESAs remain the same in 2024 as they were in 2023. The annual limit per beneficiary per is $2,000.
If you have questions about this article or 2024 contribution limits, please contact Advanta IRA. We provide administration for self-directed IRAs, solo 401(k)s, ESAs, and HSAs. Self-direction allows account owners to use alternative investments like real estate and private equity to grow tax-advantaged wealth.