Depending on your retirement plan or plans, understanding how much and when to contribute can be a frustrating endeavor. This is especially true being the max contributions can change annually to account for cost-of-living increases.

Types of Retirement Plans

401(k): an employer-sponsored, defined contribution personal pension account where employee contributions come directly out of their paychecks, and may be matched by the employer.

403(b): a tax-advantaged plan available for public education organizations, some non-profit employers, cooperative hospital service organizations, and self-employed ministers in the US.

457 Plan: a tax-advantaged deferred-compensation plan available for governmental and certain non-governmental employers in the US. The employer provides the plan, and the employee defers compensation into it on a pretax or after-tax basis.

Thrift Savings Plan: a defined contribution plan for US civil service employees and retirees, as well as members of the uniformed services.

Traditional IRA: individual retirement account in which generally the amount of money in your account (including earnings and gains) is not taxed until you take a distribution (withdrawal).

Roth IRA: a special individual retirement account where the individual pays taxes on money going into the account, and all future withdrawals are tax-free.

Simplified Employee Pension (SEP) IRA: a plan that allows employers to contribute to traditional IRAs set up for employees. A business of any size – even those who are self-employed – can establish a SEP IRA. These plans do not have the start-up and operating costs of a conventional retirement plan.

Savings Incentive Match Plan for Employees (SIMPLE) IRA: a plan that allows employers AND employees to contribute to traditional IRAs set up for employees. This plan is available to any small business (generally with 100 or fewer employees).

2023 Tax Year Max Contributions

401(k), 403(b), Most 457 Plans, & Thrift Savings Plan: $22,500
Traditional IRA: $6,500
Roth IRA: $6,500
SEP IRA: $66,000
SIMPLE IRA: $15,500

Please Note: Certain retirement plans also offer “catch-up” options, generally available to those age 50 and older who did not reach the max contribution to their plan in the prior year. These options are plan-specific, and can be explored by working with a qualified tax advisor to understand your options.

2024 Tax Year Max Contributions

401(k), 403(b), Most 457 Plans, & Thrift Savings Plan: $23,000
Traditional IRA: $7,000
Roth IRA: $7,000
SEP IRA: $69,000
SIMPLE IRA: $16,000

Final Day to Contribute Towards Prior Tax Year

The final day to contribute to or max out your contribution varies by retirement plan.

401(k), 403(b), & Most 457 Plans: December 31st of current year
Thrift Savings Plan: final pay date in December of current year
Traditional IRA: April 15th of subsequent year
Roth IRA: April 15th of subsequent year
SEP IRA: April 15th of subsequent year
SIMPLE IRA: January 30th of subsequent year

The Importance of Planning For Your Retirement

At Crossover Capital, our number one goal is to provide people with the support, knowledge, and access to make informed decisions about their financial futures. Building a foundation for success starts with steady support and a customized approach. Crossover Capital is here to provide the necessary tools required for growth, and to be a champion for our clients’ success.

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This material is intended for informational purposes only. It should not be construed as legal or tax advice and is not intended to replace the advice of a qualified attorney or tax advisor. The information contained may have been compiled from third party sources and is believed to be reliable.