Retirement account types and 2024 contribution limits
Key takeaways
04 · ideas- 401(k) employee limit: $23,000 in 2024 ($30,500 with catch-up for age 50+)
- IRA limit: $7,000 in 2024 ($8,000 with catch-up)
- Roth IRA eligibility phases out above certain income thresholds
- HSA offers deductible contributions, tax-free growth, and tax-free medical withdrawals
Basic level
The essentials · 1 min
| Account | Tax on contribution | Growth | Withdrawal |
|---------|--------------------|---------|-----------|
| Traditional 401(k) | Pre-tax (deductible) | Tax-deferred | Ordinary income |
| Roth 401(k) | After-tax | Tax-free | Tax-free |
| Traditional IRA | Deductible* | Tax-deferred | Ordinary income |
| Roth IRA | After-tax | Tax-free | Tax-free |
| HSA | Pre-tax | Tax-free | Tax-free (medical) |
*IRA deductibility phases out if you or a spouse has a workplace retirement plan at certain income levels.
Intermediate level
How it applies · 2 min
2024 contribution limits
| Account | 2024 limit | Catch-up (age 50+) |
|---|---|---|
| 401(k), 403(b), 457 | $23,000 | +$7,500 = $30,500 |
| IRA (Traditional or Roth) | $7,000 | +$1,000 = $8,000 |
| SEP-IRA | 25% of compensation, max $69,000 | N/A |
| HSA (individual) | $4,150 | +$1,000 at age 55+ |
| HSA (family) | $8,300 | +$1,000 at age 55+ |
Roth IRA income phase-outs (2024)
| Filing status | Phase-out range |
|---|---|
| Single | $146,000-$161,000 |
| Married filing jointly | $230,000-$240,000 |
Above these thresholds, direct Roth IRA contributions are not permitted. A backdoor Roth strategy (contributing to a Traditional IRA and converting) may be available to higher earners.
HSA triple tax benefit
An HSA (available with a High-Deductible Health Plan) offers: pre-tax contributions, tax-free growth, and tax-free withdrawals for qualified medical expenses. After age 65, HSA funds can be withdrawn for any purpose with only ordinary income tax — effectively functioning as a supplemental retirement account for non-medical expenses.
Advanced level
The math, step by step · 1 min
Required Minimum Distributions
Traditional IRAs and 401(k)s require minimum withdrawals beginning at age 73 (per SECURE 2.0 Act, 2022). Roth IRAs are not subject to RMDs during the owner's lifetime. Failure to take RMDs results in a 25% excise tax on the amount not withdrawn. Roth 401(k)s required RMDs prior to SECURE 2.0; the Act eliminated this requirement.