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New Retirement Catch-Up Rules

December 21, 2023

If you are over 50, you are allowed a catch-up provision to your employer retirement plan. In 2023, that equals $7,500 for your 401(k) plan. If you are contributing to an IRA, you can add an additional $1,000.

In 2024, the rule changes if you make over $145,000 and contribute to a 401(k). The Secure 2.0 Act passed December 2022, requires the catch-up provisions be contributed to a Roth 401(k) (after-tax contribution) as opposed to the pre-tax 401(k).

After 2023, the catch-up provision won’t reduce your taxable income. On the other hand, you will be able to withdraw money saved in your Roth 401(k) tax-free.

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