Month: December 2023

News You Should Know: IBM Reviving DB Plan; Will Other Companies Follow?

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Will IBM Resurrection of Cash Balance Plan Cause a Ripple Effect? | PLANSPONSOR

IBM made headlines in November when it announced it was ending its 401(k) match program in favor of a new defined benefit retirement account, a rarity among private-sector employers. The move has experts debating whether more companies will follow suit and open or reopen pension plans for their employees.

8 Forces That Shaped 2023—in Charts | Investopedia

2023 has been a memorable year in the markets, with events such as bank failures, interest rate raises, and labor strikes sending ripples through the economy. Take a visual look at some of the major events that told the financial story of 2023.

One Key Rule for Understanding Your 2023 RMD | Kiplinger

The impending end of the year might have you thinking about required minimum distributions (RMDs) from retirement accounts like 401(k)s. Changes to RMD rules in SECURE 2.0 legislation have made it a little more complicated to determine who’s required to start taking RMDs when, so here’s a simple guide.

Got Unused 529 Plan Money? Here’s Some Good News | Next Avenue

Another change included in SECURE 2.0 will allow for unused funds in 529 college savings accounts to be rolled over into a retirement account. Beginning in January, you’ll be able to rollover excess funds from a 529 plan into a child’s Roth IRA, kickstarting their retirement savings.

News You Should Know is a digest of news from publications around the nation about finance, investing, and retirement.

Updated Tax Brackets, Contribution Limits, Other Changes for 2024

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The Internal Revenue Service (IRS) announced inflation adjustments for many tax provisions in 2024, including higher contribution limits for various types of accounts and updated tax brackets.

Retirement account contribution limits

The IRS increased contribution limits for individual retirement accounts (IRAs), as well as 401(k), 403(b), and most 457 plans.

The maximum amount a worker can contribute to 401(k)/403(b)/457 plans is $23,000 in 2024, an increase of $500. The IRA contribution limit also increased $500 to $7,000. Catch-up contribution limits remain unchanged in 2024.

HSA & FSA contribution limits

The amount workers can contribute to medical savings accounts will also increase in 2024.

Individuals enrolled in a high deductible health plan (HDHP) with a health savings account (HSA) will be able to contribute up to $4,150 and those with family coverage will be able to save a maximum of $8,300.

For workers who don’t have an HDHP with an HSA and instead use a flexible spending account (FSA), the maximum contribution for 2024 is $3,200. For plans that allow unused balances to roll over, the maximum amount that can be rolled over will increase to $640.

2024 tax rates

Below are updated marginal tax rates for single taxpayers and married couples filing jointly. See the IRS website for more tax tables and additional details. Since these changes will take effect for tax year 2024, they will generally apply to tax returns filed in 2025.

  • 10% for incomes of $11,600 or less ($23,200 for married couples filing jointly)
  • 12% for incomes over $11,600 ($23,200 for married couples filing jointly)
  • 22% for incomes over $47,150 ($94,300 for married couples filing jointly)
  • 24% for incomes over $100,525 ($201,050 for married couples filing jointly)
  • 32% for incomes over $191,950 ($383,900 for married couples filing jointly)
  • 35% for incomes over $243,725 ($487,450 for married couples filing jointly)
  • 37% for incomes over $609,350 ($731,200 for married couples filing jointly)

In addition to updated tax rates, the IRS announced increases to the standard deduction for tax year 2024:

  • Single taxpayers and married couples filing separately: $14,600 ($750 increase)
  • Heads of household: $21,900 ($1,100 increase)
  • Married couples filing jointly: $29,200 ($1,500 increase)

Visit the IRS website for more adjustments and tax changes for 2024.

PERA benefits and taxes

Colorado PERA benefits are subject to federal income tax, as well as applicable state and local taxes. PERA retirees who would like to update their tax withholding can do so by logging in to their secure member account or completing a paper Form W-4P. Learn more information at copera.org/taxes-on-benefits.

Year in Review: Top Articles of 2023

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With 2023 winding down and a new year approaching, we’re taking a look back at the topics and articles that resonated with PERA On The Issues readers over the past 12 months. Legislation — at both the state and federal levels — was by far the most popular topic this year.

Here are the articles that caught your interest in 2023.

An Update on 2023 WEP/GPO Legislation

Every Congress, lawmakers introduce bills to modify and/or repeal Social Security’s Windfall Elimination Provision and Government Pension Offset, which can reduce Social Security benefits for retirees receiving pension income. This year was no different, with efforts in the House and Senate receiving hundreds of cosponsors. So far, none of those bills have moved any further through Congress.

2023 Proposed Legislation Status

The Colorado General Assembly is always a popular topic on PERA On The Issues, and 2023 was no exception. Our article tracking the status of PERA-related legislation was one of the most-read articles of the year. Out of seven proposed bills, lawmakers ultimately passed three of them.

Colorado Legislators Pass Three PERA-Related Bills During 2023 Legislative Session

Gov. Jared Polis signed all three PERA-related bills into law. One bill requires a description of climate-related investment risks, impacts, and strategies to be included in PERA’s annual Investment Stewardship Report, one allocated additional money to make up the state’s 2020 direct distribution of $225 million to PERA, and the third modified the definition of “State Trooper” to include certain Colorado Parks and Wildlife officers for the purpose of PERA benefits.

News You Should Know: Larger TABOR Refund Checks Coming in 2024

In June, state officials announced that TABOR refund checks owed to Coloradans next year would be higher than initially expected. Since then, lawmakers passed a bill that sets the refund payments at $800 for single tax filers and $1,600 for joint filers.

Test Your Knowledge of PERA Benefits

In March, we published this quiz about PERA benefits, testing our readers’ knowledge on topics such as the PERA Board of Trustees, retirement benefit calculations, and purchasing service credit. So far, more than 3,400 people have taken the quiz and boosted their knowledge of PERA in the process.

Thank you to everyone who read PERA On The Issues and subscribed to our newsletter in 2023. We look forward to sharing more with you next year, beginning with the start of the 2024 legislative session in early January. We’ll see you then!

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