New 401(k) Limits and More for 2025
Preparing for retirement just got a little more financial wiggle room. The IRS recently announced 2025 retirement plan contribution limits and income phaseout ranges.
For employees who participate in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plans, you can now contribute up to $23,500 – that's $500 more than the 2024 limit. This means you can potentially save and invest more towards your golden years.
The catch-up contribution limit that applies for employees age 50+ remains at $7,500 for 2025. The IRS introduced a new "catch-up" contribution specifically for individuals aged 60 to 63. These individuals can contribute an additional $11,250 instead of the $7,500. This could be significant, especially for those who may have started saving later in life and need to accelerate their retirement savings.
Staying put for 2025 are traditional Individual Retirement Accounts (IRAs) and Roth IRAs with the limit remaining at $7,000. The catch-up contribution for age 50+ remains at $1,000 as well.
The IRS has adjusted the income phase-out ranges for deductible traditional IRA contributions and Roth IRA contributions. This means more taxpayers may be eligible to contribute to these retirement accounts and take advantage of their tax benefits.
Here is a summary of the 2025 phaseout ranges:
Account Type | Filing Status | Income Range |
Traditional IRA Deductibility (If covered by a plan) | Married Filing Jointly | $126,000 - $146,000 |
Traditional IRA Deductibility (If covered by a plan) | Single | $79,000 - $89,000 |
Traditional IRA Deductibility (If covered by a plan) | Married Filing Separately | $0 - $10,000 |
Traditional IRA Deductibility (Non-covered spouse) | Married Filing Jointly | $236,000 - $246,000 |
Roth IRA Contribution | Married Filing Jointly | $236,000 - $246,000 |
Roth IRA Contribution | Single & Head of Household | $150,000 - $165,000 |
Roth IRA Contribution | Married Filing Separately | $0 - $10,000 |
These changes provide a great opportunity to review your retirement plan and ensure you're maximizing your contributions and taking full advantage of the new limits and phaseout ranges. We are here to help you navigate these changes and optimize your retirement plan!
https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
-EnRich Financial Partners LLC
Investment Advisory Services offered through EnRich Financial Partners LLC, a Registered Investment Advisor.
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