Products November 2, 2023

Investment Product & Service Launches

Vanguard to expand municipal bond ETF lineup; Planswell expands free offering to retirees; John Hancock Investment Management expands ETF lineup; and more.

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Vanguard to Expand Municipal Bond ETF Lineup

Vanguard announced plans to launch two index municipal bond exchange-traded funds, Vanguard Intermediate-Term Tax-Exempt Bond ETF and Vanguard California Tax-Exempt Bond ETF. The ETFs will be managed by Vanguard’s Fixed Income Group, which has overseen municipal bond portfolios for more than 40 years.

“These new strategies will offer tax-sensitive investors low-cost exposure to important segments of the municipal bond market through the ETF product structure,” Dan Reyes, global head of Vanguard’s portfolio review department, said in a statement.

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The Vanguard Intermediate-Term Tax-Exempt Bond ETF is for investors with tax sensitivity, an intermediate-term time horizon and a preference for passive management. The ETF is designed to provide federally tax-free yield in an efficient and low-cost ETF structure and to complement Vanguard’s existing short-term and broad market national tax-exempt ETFs.

Vanguard California Tax-Exempt Bond ETF is also designed for tax-sensitive investors with an intermediate-term time horizon and a preference for passive management but will be specifically designed for residents of California. The ETF is designed to provide yield that is tax-exempt at both the federal and state levels for California residents.

Planswell Expands Free Offering to Retirees

Planswell, a financial services company, has expanded its capabilities to households already living in retirement.

To date, the software has been used to model and optimize wealth accumulation across tax-efficient investment accounts, insurance and debt for families approaching retirement. Now, people who are already retired can use Planswell to learn how to optimize their retirement plan. 

“Our platform has always modeled asset de-accumulation for our users,” Eric Arnold, Planswell’s CEO, said in a statement. “But our calculations were based on income and savings of pre-retirees. Now, we can optimize everything for people who are already in de-accumulation mode. It’s a game changer for a huge part of the population.”

Checking the box “I’m already retired” at Planswell.com will take users through an experience they can complete on their phone in about three minutes, according to Planswell. Retirees will learn how they can implement tax-efficient planning strategies.

John Hancock Investment Management Expands ETF Lineup

John Hancock Investment Management, a company of Manulife Investment Management, will launch two exchange-traded funds to expand its ETF lineup and bring additional income and capital appreciation opportunities to investors.

John Hancock Dynamic Municipal Bond ETF is the firm’s first municipal bond ETF, which seeks a high level of interest income exempt from federal income tax. John Hancock Fundamental All Cap Core ETF is the firm’s first active semi-transparent ETF and seeks long-term capital appreciation.

“Regardless of the broader macro environment or prevailing market conditions, strategies that aim to provide income and capital appreciation opportunities are appealing to investors,” Steve Deroian, co-head of retail product at John Hancock Investment Management, said in a statement. “Our new ETFs, managed by our affiliated subadvisor, Manulife Investment Management, reflect our ability to deliver solutions across the allocation spectrum for our clients.”

The firm’s ETF suite totals 12 funds with more than $5 billion in assets under management, as of September 30, including preferred income, mortgage-back securities, corporate bond, municipal bond, U.S. and international equity portfolios.

Vanguard International Dividend Growth Fund Now Available for Investment

Vanguard announced that its Vanguard International Dividend Growth Fund is now available for investment, beginning with a two-week subscription period.

The fund is actively managed by Wellington Management Co. and seeks to compound wealth over time by investing in companies that can grow their dividends over the long term. The subscription period will conclude at the end of the business day on November 14.

“We believe the International Dividend Growth Fund is a compelling option for investors seeking increased international equity exposure in their portfolios,” Dan Reyes, head of Vanguard’s portfolio review department, said in a statement. “The fund also complements our existing dividend growth franchise, and we’re confident in the proven investment philosophy and process employed by Wellington Management’s Dividend Growth team.”

The new fund features companies with strong balance sheets and high, sustainable free cash flows, which enable them to grow their dividends over time while continuing to reinvest in future growth, according to Vanguard. The fund will have a single share class with an estimated expense ratio of 0.54%, compared with the industry average of 1.02%. The fund’s minimum initial investment is $3,000.

Compliance November 2, 2023

Maximum Benefit and Contribution Limits Table 2024

Maximum Benefit/Contribution Limits for 2019 through 2024, with a downloadable PDF of limits from 2014 to 2024.

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Maximum Benefit/Contribution Limits for 2019-2024
 As Published by the Internal Revenue Service


PDF of Maximum Benefit/Contribution Limits for 2014-2024 available here.

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202420232022202120202019
Elective Deferrals (401k
& 403b plans) 		$23,000$22,500$20,500$19,500$19,500$19,000
Annual Benefit Limit $275,000$265,000$245,000$230,000$230,000$225,000
Annual Contribution Limit $69,000$66,000$61,000$58,000$57,000$56,000
Annual Compensation Limit $345,000$330,000$305,000$290,000$285,000$280,000
457(b) Deferral Limit $23,000$22,500$20,500$19,500$19,500$19,000
Highly Compensated Threshold $155,000$150,000$135,000$130,000$130,000$125,000
SIMPLE Contribution Limit $16,000$15,500$14,000$13,500$13,500$13,000
SEP Coverage Limit $750$750$650$600$600$600
SEP Compensation Limit $345,000$330,000$305,000$290,000$285,000$280,000
Income
Subject to
Social Security 		$168,600$160,200$147,000$142,800$137,700$132,900
Top-Heavy Plan Key Employee Comp $220,000$215,000$200,000$185,000$185,000$180,000
Catch-Up Contributions

$7,500

$7,500

$6,500

$6,500

$6,500

$6,000
SIMPLE Catch-Up Contributions $3,500$3,500$3,000$3,000$3,000$3,000

The Elective Deferral Limit is the maximum contribution that can be made on a pre-tax basis to a 401(k) or 403(b) plan (Internal Revenue Code section 402(g)(1)). Some still refer to this as the $7,000 limit (its original setting in 1987).

The Annual Benefit Limit is the maximum annual benefit that can be paid to a participant (IRC section 415). The limit applied is actually the lessor of the dollar limit above or 100% of the participant’s average compensation (generally the high three consecutive years of service). The participant compensation level is also subjected to the Annual Compensation Limit noted below.

The Annual Contribution Limit is the maximum annual contribution amount that can be made to a participant’s account (IRC section 415). This limit is actually expressed as the lessor of the dollar limit or 100% of the participant’s compensation, applied to the combination of employee contributions, employer contributions and forfeitures allocated to a participant’s account.

In calculating contribution allocations, a plan cannot consider any employee compensation in excess of the Annual Compensation Limit (401(a)(17)). This limit is also imposed in determining the Annual Benefit Limit (above). In calculating certain nondiscrimination tests (such as the Actual Deferral Percentage), all participant compensation is limited to this amount, for purposes of the calculation.

The 457 Deferral Limit is a similar restriction, applied to certain government plans (457 plans).

The Highly Compensated Threshold (section 414(q)(1)(B)) is the minimum compensation level established to determine highly compensated employees for purposes of nondiscrimination testing.

The SIMPLE Contribution Limit is the maximum annual contribution that can be made to a SIMPLE (Savings Incentive Match Plan for Employees) plan. SIMPLE plans are simplified retirement plans for small businesses that allow employees to make elective contributions, while requiring employers to make matching or nonelective contributions.

SEP Coverage Limit is the minimum earnings level for a self-employed individual to qualify for coverage by a Simplified Employee Pension plan (a special individual retirement account to which the employer makes direct tax-deductible contributions.

The SEP Compensation Limit is applied in determining the maximum contributions made to the plan.

EGTRRA also added the Top-heavy plan key employee compensation limit.

Catch up Contributions, SIMPLE “Catch up” deferral: Under the Economic Growth and Tax Relief Act of 2001 (EGTRRA), certain individuals aged 50 or over can now make so-called ‘catch up’ contributions, in addition to the above limits.

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