The IRS has announced updated contribution limits for retirement plans in 2025, allowing individuals to save more for their futures. The 401(k) contribution limit is now increased to $23,500, a rise from $23,000 in 2024. Meanwhile, the IRA contribution limit stays at $7,000, but other changes are worth noting for taxpayers planning their retirement savings strategy.
Key Changes for 2025
Increased 401(k) and IRA Contribution Limits
- 401(k) and Similar Plans: Individuals contributing to 401(k), 403(b), governmental 457 plans, and the federal Thrift Savings Plan can save up to $23,500.
- IRA: The standard annual contribution limit remains $7,000. However, catch-up contributions and eligibility income ranges are adjusted.
2025 Contribution Limits
| Retirement Plan Type | 2024 Limit | 2025 Limit |
|---|---|---|
| 401(k), 403(b), Gov. 457, Thrift Savings | $23,000 | $23,500 |
| IRA | $7,000 | $7,000 |
| SIMPLE Accounts | $16,000 | $16,500 |
Check out: What are the 401(K) Contribution Limits for 2024 in the USA?
Enhanced Catch-Up Contributions Under SECURE 2.0
Employees aged 50+ can make catch-up contributions of up to $7,500 in 2025 for 401(k) plans. Moreover, for those aged 60-63, the catch-up limit increases to $11,250.
Therefore, participants in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan who are 50 and older generally can contribute up to $31,000 each year, starting in 2025.
According to a change made in SECURE 2.0, individuals can contribute a higher amount to certain applicable SIMPLE retirement accounts. For 2025, this higher amount remains $17,600
Income Phase-Out Adjustments for IRA Deductibility and Roth IRA Contributions
The IRS has adjusted the income phase-out ranges for IRA deductibility and Roth IRA eligibility, allowing more taxpayers to qualify. Here are the new phase-out ranges for 2025:
| Filing Status | 2024 Phase-Out Range | 2025 Phase-Out Range |
|---|---|---|
| Single (Traditional IRA) | $77,000 – $87,000 | $79,000 – $89,000 |
| Married, Joint (Traditional IRA) | $123,000 – $143,000 | $126,000 – $146,000 |
| Single, Heads of household (Roth IRA) | $146,000 – $161,000 | $150,000 – $165,000 |
Saver’s Credit Income Limit
Income thresholds for the Saver’s Credit have also increased, enabling low- to moderate-income workers to benefit from retirement contributions.
| Filing Status | 2024 Income Limit | 2025 Income Limit |
|---|---|---|
| Married, Joint | $76,500 | $79,000 |
| Head of Household | $57,375 | $59,250 |
| Single, Married Filing Separately | $38,250 | $39,500 |
By understanding these changes, individuals can maximize their retirement savings for 2025.
Download Notice 2024-80Â
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