Inflation Adjusted Retirement Contribution Limits for 2025

The IRS announced the new 2025 retirement contribution limits for 401(k) plans, IRAs and other accounts, increasing several of the contribution limits for savers. This is a great opportunity for retirement savers to increase their savings rate this year. So, let’s take a look.

According to the IRS website, “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 500, from $23,000 in 2024.

The limit on annual contributions to an IRA remains $7,000. The IRA catch‑up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act of 2022 (SECURE 2.0) to include an annual cost‑of‑living adjustment but remains $1,000 for 2025.

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. 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. 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.”

If you have any further questions on the retirement contribution limits for next year, adjusting your contribution to account for the increase, or have questions on your personal financial situation, email info@shermanwealth.com or schedule a complimentary intro call here. Check out the IRS website for more information on the contribution limits.