IRS Announces New 401k Limits And New Catch-Up For 2025
The Internal Revenue Service announced an increase in the amount individuals can contribute to their 401(k) plans for 2025. The contribution limit has been raised to $23,500, up from $23,000 in 2024. However, the IRA contribution limit will remain the same at $7,000.
401k Contribution Limits
Here are the 401k contribution limits for 2025:
As you can see, this can be a huge benefit for those who enjoy contributing towards their 401ks. The limit increased by $500 for elective contributions, and $1,000 for overall contributions.
Make sure to adjust your contributions appropriately to these changes if you want to take advantage of them. Most 401k plans do not automatically increase your contribution unless you tell them to.
A big change for 2025 is the new, higher, catch-up contribution limits. For individuals aged 50 and older, the catch-up amount is still $7,500. But, for individuals ages 60-63, a new limit of $11,250 can be utilized.
IRA Contribution Limits
Here are the IRA contribution limits for 2025:
The contribution limits remained unchanged, but the income phase-outs for contributions to Roth and Traditional IRAs did increase in 2025. Traditional IRAs and Roth IRAs still will allow $7,000 contribution if you are under the age of 50. If you are over the age of 50, you can contribute up to $8,000.
With regards to SEP IRAs, you can contribute up to $70,000 or up to 25% of income.
You can view our article on self employment or small business retirement accounts here.
Remember
Remember, these higher limits don't take effect until 2025. However, given it's open enrollment season, this can be a good time to think about what you what your elective contributions to be starting in January.
Want to connect?
If you want to learn more about Interval Funds? You may reach us here to connect and schedule a free consultation.
Disclosure
IntelliVest Wealth Management is a Registered Investment Advisor Headquartered in Spartanburg South Carolina. This is not a solicitation or financial advice. This article should only be used for educational purposes. Please consult with IntelliVest Wealth Management about your personal financial situation.
