The IRS has recently released the 2024 retirement plan contribution limits. For super-savers at Shell, this is great news. Shell employees can now contribute $23,000 (or $30,500 for those over 50 years old) of pre-tax or Roth savings to the Shell Provident Fund and can get up to $84,300 (or $94,800 for married couples age 55 and above) of retirement savings into tax-efficient vessels including the HSA in 2024.
How Shell Employees Can Max Out the Shell 401(k)
The maximum amount Shell employees can put toward after-tax contributions has increased to $11,500 in 2024. Some Shell professionals accidentally overfund the after-tax source within the 401(k), which can impact the contributions they receive from Shell.
If you’re under age 50, the total IRS limit for 401(k) contributions in 2024 from employee or employer contributions is $69,000. This means employees under age 50 can contribute up to $34,500 to the Shell Provident Fund, between pre-tax and non-Roth after-tax savings.
%20Contribution%20Limits_Shell_Blog_2023_11_960x540_Under%2050.png?width=648&height=365&name=401(k)%20Contribution%20Limits_Shell_Blog_2023_11_960x540_Under%2050.png)
If you’re over age 50, the total IRS limit for 401(k) contributions in 2024 from employee or employer contributions is $76,500. If Shell contributes the full $34,500 contribution, employees over age 50 can contribute $42,000 across the Pre-Tax, Roth, or After-Tax sources.
%20Contribution%20Limits_Shell_Blog_2023_11_960x540_50%2B.png?width=648&height=365&name=401(k)%20Contribution%20Limits_Shell_Blog_2023_11_960x540_50%2B.png)
How Shell Employees Can Make Tax-Efficient Retirement Plan Contributions
If you are contributing after-tax dollars to the Shell Provident Fund, remember to roll out the after-tax funds at least once annually to a Roth IRA so that you can take advantage of the mega backdoor Roth strategy.
Many Shell employees will be able to take advantage of the backdoor Roth savings strategy. With the IRA contribution limit increasing to $7,000 ($8,000 if over age 50), super-savers at Shell can put away $49,800 ($60,300 for married couples age 55 and above) — between the Provident Fund, backdoor Roths and HSA — into tax-sheltered retirement accounts.
Are You Trying To Max Out Your Retirement Savings this Year?
Learn how to leverage your 401(k) savings with other financial strategies here >
2024 Income Limits for 401(k) Contributions and Strategic Saving for Shell Employees
The annual compensation limit for 2024 has increased from $330,000 to $345,000. If you make more than $345,000 in base and bonus compensation for 2024, remember to ensure that you max out your Provident Fund contributions before earning of income. After you earn $345,000 of income, you can no longer contribute to the Provident Fund.
Shell's 401(k) Match
Shell offers a 10% contribution to 401(k)accounts for employees that have been with the company for over nine years. Since the annual compensation limit for 2024 is now $345,000, Shell will now cap company contributions to the Provident Fund at $34,500.
Shell Employees Can Maximize Benefits with a Health Savings Account for Tax-Optimized Savings
A Health Savings Account (HSA) is often an under-utilized benefit that provides a unique triple tax advantage:
- Tax-Deductible Contributions: Contributions made to an HSA are tax-deductible, which means they lower your taxable income in the year you make the contribution. This can reduce your overall tax liability. This year, Shell Employees can contribute up to $8,300 (or $10,300 if over age 55 and both spouses are taking advantage of the catch-up contribution) for a family.
- Tax-Free Growth: The funds in your HSA can be invested, and any earnings or capital gains from these investments are tax-free as long as they remain in the account. This allows your savings to grow over time without incurring taxes.
- Tax-Free Withdrawals for Qualified Medical Expenses: When you use the HSA funds for qualified medical expenses, the withdrawals are entirely tax-free.
When using an HSA as a retirement fund, Shell Employees can benefit from both tax deductions and tax-free growth, making HSAs a valuable tool for long-term savings and retirement planning.
Shell Provident Fund Benefit Restoration Plan (BRP)
In 2024, once you begin earning more than $345,000, Shell will make their contributions to the Shell Provident Fund BRP (Benefit Restoration Plan) instead of to the Shell Provident Fund. If 2024 is the first year you expect to make more than $345,000, check that you have an allocation and investment strategy set up for your Provident Fund BRP. The 2024 limit adjustments will be advantageous for super-savers at Shell and it is important to be sure that you make the most of these changes.
At Willis Johnson & Associates, we work with our Shell clients to ensure they get the full 10% company contribution, take advantage of backdoor Roth IRAs to ensure they are on track for success, and facilitate after-tax roll-outs from the Provident Fund to get the maximum amount of savings. If you have any questions about the 2024 contribution and compensation limits, please contact your advisor, or schedule a free consultation with one of our Shell specialists.
