The 2024 Retirement Plan Annual Limits have officially been announced by the IRS. Below you will find a chart outlining the different limits on benefits and contributions for a variety of retirement plan options, along with catch-up contributions for the 2024 year.
Frequently Asked Questions about 401k Plans
What is a 401k Plan?
A retirement savings plan employers offer to their employees.
How do I put money into a 401k account?
You contribute money directly from your paycheck with pre-tax and/or after-tax dollars.
Why should I participate in my employer’s 401k retirement plan?
By contributing to the plan, you are saving money for your retirement while receiving tax benefits now or in the future depending on your contribution type.
Is my account invested in the stock market?
Depending on your company’s plan, there are several investments to choose from which consist of stocks, bonds, and cash-type instruments.
What is a match?
Your employer may offer a match based on the percentage you contribute. A safe harbor match contribution is 100% vested immediately. Other matches will have a vesting schedule associated with them.
What is a vesting schedule?
A vesting schedule states how many years an employee must work to own a percentage of the contribution the employer provides.
What if I want to close my account?
You may stop contributing to your account at any time and the account will remain active.
What happens to my retirement account if I leave my employer?
Your vested portion of the account is available for you to roll out of the plan, roll into another employer’s plan, or cash out.
Will I be penalized if I take my money out of my retirement account?
If you are under 59 ½ and terminated from your employer, the IRS imposes a 10% early withdrawal penalty if you cash out.
If I leave my employer, how do I move my money out of my account without taxes and penalties?
Once terminated from your employer, you may roll your money out into another employer’s qualified retirement plan or an individual retirement account without early withdrawal and/or tax penalties.
How can I access my money while still employed?
Some employer plans may allow for loans. Check with the plan administrator or read the plans Summary Plan Description.
Important Disclosure: This content is for informational purposes only. Opinions expressed herein are subject to change without notice. Beacon Pointe has exercised all reasonable professional care in preparing this information. Some information may have been obtained from third-party sources we believe to be reliable; however, Beacon Pointe has not independently verified, or attested to, the accuracy or authenticity of the information. Nothing contained herein should be construed or relied upon as investment, legal, or tax advice. Only private legal counsel may recommend the application of this general information to any particular situation or prepare an instrument chosen to implement the design discussed herein. An investor should consult with their financial professional before making any investment decisions.
© Beacon Pointe Advisors. All Rights Reserved.