2025 IRS Retirement Plan Limits
As in years past, 2024 was another one full of ups and downs, and I know many of us are looking forward to what the new year has in store. As 2024 comes to a close, it is a great time to reassess our financial situation and planning considerations. Each calendar year, the IRS adjusts contribution limits for retirement plans to account for inflation. Again, 2025 is no different as the IRS has recently announced the new retirement plan contributions for the year ahead.
Here are some of the more notable changes for 2025:
2025 Retirement Plan Limits for 401(k)/403(b)
Let’s start off with the most common plans. The limit for 401(k) and 403(b) plans is $23,500 for 2025, up from $23,000 last year. If you are age 50 or older, you also are allowed a “catch-up” contribution to encourage additional savings, which is $7,500 again this year for a total maximum contribution of $31,000. However, new this year is also an additional “catch up” provision for those ages 60, 61, 62, or 63, are allowed a total “catch up” contribution of $11,250.
The other adjustment is to total contributions. The adjustment to the TOTAL limit for these plans has increased to $70,000 ($77,500 including catch up contributions) in 2025 from $69,000 ($76,500 including catch up contributions) in the previous year. These amounts include employer contributions, after-tax contributions, etc., and are the absolute maximum amount that can be contributed to these plans in a given year.
2025 Retirement Plan Limits for Traditional IRAs and Roth IRAs
In 2025, the IRS did not change the contribution limit for IRAs. In 2025, savers can contribute $7,000, the same amount as in 2024. There is also an additional $1,000 “catch-up” contribution available to those 50 and older for a total of up to $8,000. Please keep in mind that IRAs and Roth IRAs have income considerations, which have been adjusted for 2025, so be sure to review these income thresholds before making contributions.
2025 Retirement Plan Limits for HSAs
HSA savings account limits have increased again for 2025. In 2025, the family plan maximum contributions increased $250 for a total of $8,550. Individuals also increased by $150 to a level of $4,300 for 2025.
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2025 Retirement Plan Limits for SEP IRAs
Business owners and self-employed individuals will be able to save a bit more this year as well. The maximum contribution to a SEP IRA increases to $70,000 in 2025, up from $69,000 in 2024. This maximum is subject to a percentage of income calculation as well.
2025 Retirement Plan Limits for SIMPLE IRA Plans
Employees with a SIMPLE IRA plan will see an increase of $500 again in 2025. The SIMPLE maximum contribution will now be $16,500 in 2025, up from $16,000 last year. Employers with 25 or fewer employees can contribute up to $17,600 to their SIMPLE plans in 2025. Due to the SECURE Act 2.0, there is an increase in the catch-up contribution limits for participants who have reached ages 60, 61, 62, or 63, which is $5,250 for 2025. SIMPLE IRA participants over age 50 (but not yet age 60, 61, 62, or 63) are also eligible to save an additional $3,500 “catch-up” contribution.
There are slight differences in 2025 for retirement contribution limits, so be sure to adjust your savings to take full advantage of your retirement accounts. Hopefully, 2025 is your best year yet, and we can look forward to less volatility in the year ahead!
If we can answer any questions about how this may relate to your financial plan, please get in touch with us below!