It’s that time of year… the IRS has announced the new rules for IRAs and Retirement plans for 2024. Staying on top of these changes each year is an excellent way to improve your financial health. Often the annual adjustments are rather small, making it relatively easy to increase your retirement savings over time without causing too much short-term pain. Remember, small modifications can make a big difference in the long run.
Other 2024 News
In addition, there’s some good news for our Texas teachers: in the November election, voters passed a constitutional amendment that will allow retired teachers to receive a cost-of-living adjustment (COLA) for the first time in twenty years. That means, starting in January 2024, retired teachers will get a bump up in their monthly pension payments – long overdue and much deserved! If you are a retired teacher, TRS (Teachers Retirement System of Texas) should be contacting you regarding the amount of the increase. TRS also has a helpful FAQ page with more details.
The Social Security Administration has also announced an increase in their payments to retirees. In 2024, there will be a 3.2% increase, which the SSA says will amount to about $59 extra per month for the average retiree. While that’s not as much as last year’s whopping 8.7% raise, it’s still helpful to those receiving SS checks. The reason the raise is less this year is because the increase is figured by a formula tied to the Consumer Price Index for Urban Wage Earners and Clerical Workers (CPI-W). This loosely tracks inflation, so a lower increase means that inflation is lower, as well. A mixed blessing, certainly.
What This Means For You
Which brings us back to those new retirement plan limits for 2024. If you’re not yet retired, one of the best ways to reduce your dependence on Social Security and other pension plans is to increase your personal savings. That means bumping up your retirement plan contributions consistently each year. So, contact your HR Department or jump online and flex your savings muscles! I know you can do it! If you need some ideas on how to save a little extra money, check out this article on The Secret to Successful Retirement Savings.
Wishing you a happy and prosperous New Year!
