The Internal Revenue Service (IRS) has released new retirement plan contribution limits for 2025.
Individual Retirement Accounts (IRAs)
IRA contribution limits remain the same in 2025 at $7,000. Catch-up contributions for those over age 50 is also still $1,000, bringing the total limit to $8,000. The income threshold to make IRA contributions increased for 2025.
Roth IRAs
Roth IRA contribution limits are going up $500, bringing the limit to $7,000. If you are 50 or older, your maximum contribution limit is capped at $8,000.
The income phase-out range for Roth IRA contributions increases to $146,000-$161,000 for single filers and heads of household, an $8,000 increase. For married couples filing jointly, the phase-out will be $230,000 to $240,000, a $12,000 increase. Married individuals filing separately see their phase-out range remain at $0-10,000.
Workplace Retirement Accounts
The annual contribution limit for employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan is increased to $23,500, up from $23,000.
The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains $7,500 for 2025. For a maximum contribution amount of $31,000.
Starting in 2025, under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in these plans. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500. For a maximum contribution amount of $34,750.
SIMPLE Accounts
A $500 increase in limits for 2025 gives individuals contributing to SIMPLE plans a $16,500 contribution limit, with an additional $3,500 catch-up contribution for savers 50 or older.
Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in SIMPLE plans. For 2025, this higher catch-up contribution limit is $5,250.
Please note, updates are for informational purposes only, so consult with your tax professional before making any changes in anticipation of the new 2025 levels. You can also contact our office for more information.
SOURCE: https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000