Retirement Plan Contribution Limits for Healthcare Professionals in 2024

Healthcare professionals, dedicated to the well-being of others, often have unique financial needs when it comes to retirement planning. The IRS has recently announced the contribution limits for qualified retirement plans for 2024, and understanding these limits and changes is crucial for healthcare professionals who wish to secure their future. In this article, we will provide a personalized overview of retirement plan contribution limits for 2024 and highlight the significant changes in retirement planning, tailored to the specific financial needs of healthcare professionals.

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401(k) Retirement Plan Contribution Limits for 2024: Healthcare professionals, like others, have the opportunity to participate in 401(k), 403(b), most 457 plans, and federal Thrift Savings Plans. In 2024, the contribution limit for these plans has increased to $23,000, up from $22,500. Moreover, healthcare professionals aged 50 and older can continue to take advantage of the catch-up contribution, which remains at $7,500, allowing a total contribution of $30,500.

Solo 401(k)s: For self-employed healthcare professionals with a Solo 401(k), the contribution limit has risen to $69,000 in 2024, with the catch-up contribution also set at $7,500 for those aged 50 or above. This provides an excellent opportunity for healthcare entrepreneurs to build substantial retirement savings.

IRA Contribution Limits for 2024: Individual Retirement Accounts (IRAs) have also seen an increase in contribution limits for 2024. Healthcare professionals who opt for regular IRAs can now invest up to $7,000, up from $6,500. Those aged 50 and older can make a catch-up contribution of $8,000, which is advantageous for those who start saving later in their careers.

SEP IRAs: For Simplified Employee Pensions (SEPs), the contribution limit in 2024 is 25% of up to $345,000 of compensation, capped at a maximum annual contribution of $69,000. This option is particularly appealing for healthcare professionals in private practice.

SIMPLE IRAs: The contribution limit for SIMPLE retirement accounts has been raised to $16,000, an increase from $15,500, with a catch-up contribution limit of $3,500 for employees aged 50 and over. This is relevant for healthcare professionals working in smaller healthcare facilities.

Deductible IRA Phaseouts for 2024: Understanding the deductible IRA phaseouts is vital for healthcare professionals. For those covered by workplace retirement plans, the phaseout ranges have been adjusted for 2024:

• For singles and heads of household, the phaseout range is now between $77,000 and $87,000, up from $73,000 to $83,000 in 2023.
• Married couples filing jointly with one spouse covered by a workplace retirement plan will see a phaseout range between $123,000 and $143,000, an increase from $116,000 to $136,000.
• Married individuals making a separate return while covered by a workplace retirement plan have a phaseout range remaining unchanged at $0 to $10,000.

Expert Tip: Even if you exceed the income limits, you can still contribute to a traditional IRA, but it will be nondeductible.

Roth IRA Phaseouts for 2024: Roth IRAs provide tax-free withdrawals in retirement, making them a strategic choice for healthcare professionals. The income phase-out ranges have been adjusted for 2024:

• For singles and heads of household, the range is now between $146,000 and $161,000, up from $138,000 to $153,000.
• Married couples filing jointly will have an increased phaseout range of $230,000 to $240,000, up from $218,000 to $228,000.

Saver's Credit Limits for 2024: The Saver's Credit, designed to benefit low and moderate-income workers, can be highly beneficial for healthcare professionals who may be carrying student loans. The credit limits have been raised:

• For married couples filing jointly, the limit is now $76,500, up from $73,000.
• Heads of household can claim a credit up to $57,375, increased from $54,750.
• Singles and married couples filing separately can benefit from a credit of up to $38,250, up from $36,500.

Additional Changes Under SECURE Act 2.0: Healthcare professionals, like many others, can take advantage of the changes brought about by the Secure Act 2.0:

• The limitation on premiums paid for qualifying longevity annuity contracts remains at $200,000 for 2024.
• The deductible limit on charitable distributions has been increased to $105,000, up from $100,000, providing more options for healthcare professionals looking to support charitable causes.
• A deductible limit has been set for a one-time election to treat a distribution from an individual retirement account made directly to a split-interest entity, which is now $53,000, an increase from $50,000.

Conclusion: Healthcare professionals face unique financial challenges and opportunities when it comes to retirement planning. Understanding the retirement plan contribution limits for 2024 and the changes introduced under the Secure Act 2.0 is essential for making informed decisions about saving for retirement. Healthcare professionals should consider consulting with financial advisors who specialize in their unique financial needs to ensure a secure and comfortable retirement, while also addressing student loan repayment and other specific financial goals.

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Michael Budnick is a seasoned financial planner, coach, and author with over 25 years of experience in empowering individuals to achieve their financial goals. As the author of four groundbreaking books, including Prescriptions For Prosperity: Maximizing Investment Returns and Achieving Success in Healthcare Leadership and The Prosperous Nurse: Your Roadmap To Wealth, Health, and Happiness , Michael has made it his mission to provide valuable financial insights specifically tailored for nurses and other healthcare professionals.

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