October Inflation Report Social Security COLA 3.2% For 2024 401k Contributions Help FAFSA

In this episode of the Planned Solutions Incorporated Podcast, The official inflation rate ticked down to 3.2%, the same level as the July report, and the lowest inflation rate in several years. All the major categories, including food, energy, and shelter declined over the past twelve months creating hope that inflation will now continue its downward trend that started over a year ago. This is also positive news for the Federal Reserve which now may be able to hold interest rates steady next meeting. Also, The Social Security Administration announced good news for people collecting benefits and bad news for some people still paying into the system. The good news is that the Social Security benefit will increase by 3.2% in 2024. The bad news is that the wage limit which is subject to Social Security taxes on earned income will increase by 5.24% in 2024. Plus, In the past, the Free Application for Federal Student Aid (FAFSA) used a parent or guardian’s gross wage income to determine a student’s eligibility for federal financial aid. Now, the FAFSA will use taxable income, which is the income after any tax-deferred retirement contributions are subtracted from the gross income. This will provide some flexibility in planning for retirement and education funding going forward. Plus a look at the Planned Solutions Incorporated Office Bulletin Board - the annual contribution limit for employees who participate in 401k, 403b, and 457 type plans will increase to $23,000 in 2024, which is a $500 increase from 2023. In addition, the catch-up provision that employees aged 50 and over can contribute will be an additional $7,500 (no change from the prior year), bringing the total employee deferrals to $30,500 for 2024. The limit on annual contributions to an IRA or ROTH IRA will increase to $7,000 in 2024, up from $6,500 in 2023. The catch-up contribution for those aged 50 and older remains the same at $1,000, bringing the total to $8,000. Limits on other small business retirement plans have also increased along with the income phase-outs for ROTH IRA eligibility. With the larger increases coming in 2024, especially with the ROTH IRA eligibility, taxpayers may want to review their overall finances to determine if they need to make any adjustments, including increasing their salary deferrals or incorporating direct ROTH contributions, if they are eligible based on the higher income thresholds. Chase Armer's book- Financial Planning Insights is now available at: https://www.amazon.com/Financial-Planning-Insights-Decades-Planner/dp/1098306279?ref_=ast_author_mpb To subscribe to the Personal Finance Review (the written form of all the content we discuss on the podcast) please e-mail [email protected] The Personal Finance Review is published and distributed biweekly by Planned Solutions, Inc. for informational purposes only. Please seek the advice of a qualified financial planner before taking any action. Planned Solutions, Inc.