2025 Retirement Savings Contribution Limits: What’s Changing (and What’s Not)
2025 Retirement Savings Contribution Limits: What’s Changing (and What’s Not)
The IRS recently announced new contribution limits for 2025, and if you're trying to stay on top of your retirement savings strategy, here’s what you need to know:
Workplace Retirement Plans
If you’re contributing to a 401(k), 403(b), 457, or the Thrift Savings Plan, the annual contribution limit is increasing to $23,500, up from $23,000.
If you're age 50 or older, you can still make a catch-up contribution of $7,500, bringing the total to $31,000
For those aged 60 to 63, a higher catch-up of $11,250 applies, per the SECURE Act 2.0
Individual Retirement Accounts (IRAs)
The contribution limit for IRAs will remain at $7,000 for 2025. If you're age 50 or older, you can still contribute an additional $1,000 as a catch-up.
A few updates on income limits for tax deductions:
Married filing jointly, with the contributing spouse covered by a workplace plan: the phase-out range is now $126,000 to $146,000, up from $123,000 to $143,000
If only one spouse is covered by a workplace plan: the phase-out is now $236,000 to $246,000, up from $230,000 to $240,000
Even if your IRA contribution isn’t deductible, it can still be a smart way to build tax-deferred retirement savings. Just be sure to file Form 8606 if you’re making after-tax (nondeductible) contributions, and keep track of those contributions so you avoid getting taxed twice later on.
Spousal IRAs
If your spouse isn’t earning income, you can still contribute to a spousal IRA on their behalf. This is a simple way to keep retirement savings growing even during periods when one spouse is out of the workforce. The limits are the same: $7,000, plus a $1,000 catch-up if they’re over 50.
A Few Planning Tips
Review your budget annually and update your retirement contributions to reflect changes in income or expenses.
If you're getting a raise or have fewer financial obligations, that may be a good time to increase savings.
You can also set up automatic monthly deposits into an IRA to maintain consistency and benefit from dollar-cost averaging.
Reminder: You can still make IRA contributions for 2024 up until the tax filing deadline (April 15, 2025). If you haven’t maxed out your 2024 contributions yet, there’s still time. Please reach out if you’d like help coordinating this or making sure it aligns with your broader financial plan.
The information contained herein is intended to be used for educational purposes only and is not exhaustive. Diversification and/or any strategy that may be discussed does not guarantee against investment losses but are intended to help manage risk and return. If applicable, historical discussions and/or opinions are not predictive of future events. The content is presented in good faith and has been drawn from sources believed to be reliable. The content is not intended to be legal, tax or financial advice. Please consult a legal, tax or financial professional for information specific to your individual situation.
