As you approach your half-century birthday, one of your gifts comes from the IRS: tax breaks starting at age 50 that can help you save more for retirement. And when you turn age 65 the tax savings are even bigger.
2024 TSP Contribution Limits
The Thrift Savings Plan (TSP) contribution limit has been increased to $23,000 for 2024 up from $22,500 in 2023. If you’re turning age 50 during the calendar year, the 2024 IRS limit for TSP Catch-Up Contributions remains at $7,500. This amount is in addition to the regular TSP limit of $23,000.This means FERS workerswho are 50 and older can contribute up to $30,500, starting in 2024.
“There’s no reason to pay Uncle Sam more than your fair share of taxes when you separate from service.”
2024 Higher Standard Deduction For Age 65 & Older
If you don’t itemize your tax deductions, you can claim a larger standard deduction for tax year 2024 if you or your spouse are age 65 or older:
- Single – $16,550
- Head of Household – $23,850
- Married Filing Jointly with one person age 65 and over) – $30,750
- Married Filing Jointly with both persons age 65 and over) – $32,300
Higher HSA Contribution Limit For 2024
HSA deposits are tax-deductible, provide tax-deferred growth, and qualified distributions used to pay for an eligible medical expenses are tax-free. For 2024, the maximum you can save in an HSA has been raised to $4,150 for individuals and $8,300 for families. Workers age 55 and older can save an additional $1,000 above these amounts.
Higher 2024 Tax Deductions For LTC Insurance Premiums
Age 50 is a good time to start thinking about Long-Term Care (LTC) insurance to cover non-medical care in a nursing home. Since a portion of your premium is tax deductible based on your age, tax deduction limits are something to consider when you’re choosing coverage:
- Between ages 41 and 50: The slightly higher maximum deduction for 2024 is $880.
- Between age 51 and 60: The deduction has increased to $1,760.
- Between age 61 and 70: The deduction has increased to $4,710.
- Age 71 or older: The maximum deduction is $5,640.
Keep in mind — the 2024 federal income tax brackets have also been raised to help provide some tax relief due to inflation. To learn more, go to our article: Projected 2024 Tax Brackets.
There’s no reason to pay Uncle Sam more than your fair share of taxes when you separate from service. Your FRC® trained advisor can connect you with a tax professional who understands the ins and outs of your federal benefits.
