The IRS said Wednesday that it lifted the amount that workers can set aside for retirement in their 401(k), IRA and other tax-deferred plans next year.

Beginning in 2024, workers will be allowed to contribute up to $23,000 to their 401(k), an increase of $500 from this year. The increase applies to other retirement savings accounts, including the 403(b) plan, most 457 plans and the federal government’s Thrift Savings Plan.

  • @paultimate14
    2•1 year ago

    For reference, someone full-time at Federal minimum wage (which is unlikely: most minimum wage jobs are fewer hours) makes $15,080.

    The amount was already too high to begin with. You add in IRA’s and 401k catch-up and it gets even worse.

    It’s mostly a benefit to upper-middlenclass people. The executive officers, presidents, VP’s, and upper-level managers making $200,000-$500,000/year in employment income. An extra $500/year of deductible income probably doesn’t move the needle much either way.

    My guess is that it’s not a huge loss of tax revenue, it’s not a significant increase to their retirement savings, not a huge increase in money being invested into the economy. $500 is only 2% of $22,500. Given inflation, it’s hard to imagine this increasing by anything less than that. All in all, the change seems reasonable to me, and at least moving in the right direction if not getting there immediately in 2024.