IRS Increases 401(k) Contribution Limit for 2025

The IRS has announced key changes for retirement contribution limits in 2025, increasing the 401(k) cap to $23,500, a $500 rise from 2024, while maintaining the IRA limit at $7,000. Income thresholds for IRA deductions, Roth IRA contributions, and the Saver’s Credit have also been raised, allowing more individuals to qualify. For those 50 and older, catch-up contributions for 401(k) plans stay at $7,500, bringing the total to $31,000, while employees aged 60 to 63 can now contribute an additional $11,250. SIMPLE account contributions are also up to $16,500, with enhanced catch-up options based on age, adding flexibility for older savers. Full details are available in IRS Notice 2024-80.

If you would like to read more, please visit:

https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000