What are the 401k contribution limit for 2024?
The following provides a basic information regards to 401k contribution allowed amount for 2024, which was stated in Fideility.com. We are still at the beginning of 2024. If you would like to plan out your 2024 tax strategy, it is still a good time to do.
“The 401(k) contribution limit for 2024 is $23,000 for employee contributions, and $69,000 for the combined employee and employer contributions. If you’re age 50 or older, you’re eligible for an additional $7,500 in catch-up contributions, raising your employee contribution limit to $30,500.”
What are the tax advantages of different 401k contribution?
- Pretax 401k – it is pretax contribution, so reduce taxable income, but pay tax at withdrawal
- 401k roth – it is after tax contribution, will not reduce taxable income, but the earning will grow tax-free after 5 years in the fund
- After-tax 401k – it is after tax contribution, will not reduce taxable income. However, depends on your plan, it can be rolled into 401k roth.
Disclaimer: I am not a financial planner nor a lawyer. What I published here is for entertainment purpose only. Please do your own research before your financial/tax planning and investment.
The above attributes to Fidelity online Learning Center. <https://www.fidelity.com/learning-center/>