It looks like 2024 is shaping up to be a rather run of the mill tax year.
Inflation is finally cooling, but the annually adjusted tax figures are still high. One silver lining is increased contribution limits to qualified retirement plans.
All of Moneytree’s financial planning can allow you to easily update financial plans to reflect these new limits. Online users should see the new values reflected automatically starting Jan. 1. Desktop users can expect to see prompts to update at the start of the year.
Moneytree Advise
In Moneytree Advise, contributions to IRAs and Roth IRAs are limited to annual limit. By simply overstating the contributions a bit, the program will automatically cap the contributions, increasing periodically for inflation in the same way that the IRS does. If overstated enough, they will also automatically increase contributions for the catch-up amounts once your clients are 50 or older.
Due to the range in contribution limits for various employer sponsored retirement plans, such as 401ks and SEPs, Moneytree Advise does not capture the contribution limits for those retirement plans. However, since the additions are entered on an annual basis, modeling the contribution limits is as simple as entering the amount. To capture catch-up contributions, you can create a new 401k or similar type investment with a value of $0, then enter the contributions starting at the calendar year the client reaches 50. Amounts should be entered in today’s dollars. If the number of years is , then the program will automatically stop additions at the owner’s retirement.
Moneytree Plan
Moneytree Plan does not cap manual additions to any type of retirement plan. Instead, you can go to the Retirement Plan Strategies tab of the Assets section to elect whether a retirement plan should be automatically maximized. All you have to do is go through the table, select the plan(s) that the clients want to maximize, then check the box(es). Moneytree Plan will compare the maximum to other additions and accept the higher of the two. This way, if your plan incorporates additions that reflect strategies that additions beyond that limit, such as a backdoor Roth conversion or lump sum pension, then those will not be overridden.
