Weekend Read: 2025 Retirement Contribution Limits Changes
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The IRS has announced the retirement plan contribution limits for 2025, and while there are changes for some accounts, others are holding steady.
401(k) Contribution Limit Increases
The big news for 401(k), TSP, 403(b), 457 etc. plans is a slight bump in contribution limits. Starting in 2025, the maximum you can contribute to these plans will rise to $23,500, up from $23,000 in 2024. If you are over 50 then the standard catch contribution remains unchanged at $7,5001.
New Enhanced Catch-Up Contributions for Ages 60-63
One of the most notable changes for 2025 is the introduction of enhanced catch-up contributions for people aged 60 to 63. This provision, introduced under the SECURE Act 2.0, allows those in this age group to contribute up to $11,250 in catch-up contributions to their plans. That’s a significant increase compared to the standard catch-up contribution of $7,500 for those aged 50 and older1.
These enhanced catch-up contributions are intended to help workers in their early 60s typically at their peak earning years to save more aggressively.
The enhanced limit applies exclusively to workers aged 60 to 63. Once you turn 64, you return to the standard catch-up contribution limit of $7,5001.
IRA Contribution Limit Remains Unchanged
For those contributing to Individual Retirement Accounts (IRAs), the annual limit holds steady at $7,000 for 20251.
What do you need to do?
If you are contributing and trying to max out, you need to take a look at how your contribution amount is calculated to make sure that enough will be deducted for you to hit the new ceiling. If we work together I’ll be reaching out early 2025 to make sure you’re all set.
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1https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
Individuals are encouraged to consult their tax and legal advisors (a) before establishing or changing a Retirement Account, and (b) regarding any potential tax, ERISA and related consequences of any investments or other transactions made with respect to a Retirement Account. Tax laws are complex and subject to change. Steward Partners does not provide tax or legal advice.
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