Don’t Look Now But 2024 is Just Around the Corner

November 14, 2023 By Brian Horan, CPWA®
Grand Central Terminal clock. West Financial Services

As the leaves begin to change and our thoughts shift towards the year-end holidays, it is also time to start thinking about upcoming changes in 2024 and some strategies to consider before the clock strikes midnight on December 31st.

Retirement plan contributions: 50+ catch-up retirement contributions

Current tax law allows workers over the age of 50 to make additional contributions to their company retirement plans above the standard contribution limits for younger workers. For 2023, the maximum “catch-up” amount increased to $7,500. However, a provision in the Secure 2.0 legislation required that these catch-up contributions be deposited into a Roth account starting in 2024, meaning they would be made with after-tax dollars. While that could be desirable for some workers, the mandate will eliminate the flexibility of whether to make pre-tax or after-tax contributions. Thankfully, the IRS announced in late August of this year that they were implementing a two-year delay on that requirement so the ability to make pre-tax catch-up contributions is still available through the end of 2025.

Annual gift giving limits and lifetime exclusion amount 

Many clients utilize annual gifts to family and friends to assist those they care about as well as reduce any potential estate tax burden when they die. For 2023, the maximum amount that an individual can give to someone else without having to file a gift tax return with the IRS has increased to $17,000. The lifetime exclusion amount increased to $12,920,000 for this year. While this is a large amount for most Americans, it is important to remember that it includes your entire taxable estate, not just bank and brokerage accounts. After adding the values of real estate and business interests, clients often find they are approaching or exceeding this level. It is also important to note that the formula for calculating the maximum exclusion amount will decrease in 2026 unless Congress acts to extend the provisions of the 2017 Tax Cuts and Jobs Act. So, there is a window of opportunity to make some decisions before any future reduction takes place. 

Charitable giving utilizing DAF bunching with itemization

The end of the calendar year is a popular time for clients to review their charitable giving goals. One strategy that we recommend our clients consider to reduce their annual income tax burden is the use of a Donor Advised Fund (DAF). The higher standard deduction amount that came with the passage of the Tax Cuts and Jobs Act of 2017 means many clients no longer benefit from itemizing deductions when they file their returns. For clients who are already charitably inclined, “bunching” charitable donations via a DAF can be a good solution. The concept involves making a larger, one-time donation to a DAF than you would typically make in any single calendar year to exceed the standard deduction and allow you to itemize the amount of the charitable donation. Once the funds have been deposited into the DAF, you can then request that the DAF make gifts to the non-profit groups that you wish to support. Donations from the DAF can be spread out over multiple years, so the charity still receives the same annual amount they would have received but you gain some potential tax benefits. You will most likely not use this “bunching” strategy every year, but it can be useful in years with higher taxable income levels. Please consult with your tax advisor before moving forward with this strategy and reach out to your relationship manager to help with the implementation of the plan.

2024 SS increase of 3.2% after an 8.7% increase in 2023

After a historically large percentage increase to the Social Security benefit in 2023, the Social Security Administration announced on October 12th that the cost-of-living adjustment (COLA) for 2024 will be 3.2%. Current beneficiaries can check on their specific benefit by logging into their account via the Social Security website

2024 Medicare Part A & B premium announced 

In other Federal benefit news, the Centers for Medicare and Medicaid Services (CMS) announced the monthly premiums for Medicare Parts A & B for 2024. Since premiums vary due to income ranges, the CMS publishes the various monthly premiums on their website for review at

FAFSA form delayed until December

For those with children who are already enrolled or about to enter college, the Free Application for Federal Student Aid (FAFSA) is an important component that you need to complete in order to determine the types and amounts of financial aid that your student is eligible to receive. Typically, the window to complete the online form opens in October. But this year, due to some changes to the methodology used, the application for the 2024-2025 school year will not be available until sometime in December. If you, or someone in your family, is impacted by this delay you can stay updated by visiting the Department of Education’s financial aid website at

The end of the year is often a time filled with lots of family gatherings and special events so try to make some time to review your financial situation before the year ends, and it is too late to make any adjustments. Please reach out to your team here at West Financial if you need help sorting through any of the topics mentioned above. Happy Holidays! 

Meet Brian Horan, CPWA® »

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