In 2024, make sure your workplace retirement account contributions are up to date

The beginning of the new year is a good time to check your workplace retirement accounts to review your contributions.

For 2024, the contribution limit for 401k, 403b and 457 workplace retirement plans is $23,000, up from $22,500 in 2023. If you’re age 50 or over, you can contribute an extra $7,500. For traditional and Roth IRAs, the contribution limit for 2024 is $7,000, up from $6,500. SEP IRA contributions in 2024 max out at $69,000, up from $66,000 in 2023.

For workplace retirement accounts, it’s always a good idea to make sure you are taking full advantage of your employer match.

There may be no such thing as a free lunch. But the 401k employer match comes pretty close. Nearly all companies with 401k plans offer some sort of 401k employer match program. While the match specifics vary by company, under the most common program the employer matches the employee’s contribution dollar-for-dollar up to 6% of the worker’s annual salary.

Maximizing the employer match is one of the smartest retirement savings decisions you can make because you’re essentially adding free money to your 401k account. The 401k employer match also provides an immediate return on your investment. Plus, the money your employer contributes does not count toward the $23,000 that the Internal Revenue Service lets you contribute annually.

Any way you look at it, the 401k employer match is an easy way to boost your retirement savings.

Free Money

Let’s look at an example that shows how the 401k employer match works. Suppose you earn $100,000 and elect to sock away $10,000 annually in your 401k account. And suppose that your employer matches your contributions up to 6% of your total salary. In this scenario, the company would contribute $6,000 to your 401k, bringing the total annual contribution up to $16,000.

A recent study of participation in 401k employer match programs found that workers who don’t save enough to receive the full company match miss out on an average of $1,336 annually. What’s worse? Over 20 years, the forfeited match payments become more than $42,000 when compounded at a 4.4% return.

To make sure that you’re taking full advantage of your 401k employer match:

• Check your 401k plan’s website
• Adjust your contributions if necessary
• Contact one of our advisors today for guidance on contributions, investment selections and more advice on how to best save for your retirement

Plus, Elevage Partners can manage your workplace retirement account and make sure that your asset allocation is aligned with your risk tolerance and the goals outlined in your financial plan. We’re always here to help you with investing for your WHY.