Great news for anyone looking to start—or boost—their retirement savings: 2025 is shaping up to be a year where you can stash even more for the future. The IRS has upped the contribution limits for 401(k) and IRA accounts, giving people more breathing room to grow their nest eggs. Limits keep up with the cost of living [1] and could be the nudge you need to get your retirement savings on track. Whether you’re a seasoned saver or just dipping your toes into retirement planning, these new limits can make a real difference.
Higher 401(k) Contribution Limits
In 2025, you’ll be able to contribute more to your 401(k), 403(b), most 457 plans, and the federal Thrift Savings Plan. The new annual contribution limit will be $23,500, up from $22,500 in 2024 [2]. This adjustment lets you set aside more funds in a tax-advantaged way, reducing taxable income while building retirement wealth.
Expanded Catch-Up Contributions for Ages 50+
If you’re 50 or older, the catch-up contribution remains at $7,500, so your potential total annual 401(k) contribution could be as high as $31,000. This is great for anyone trying to play catch-up with their retirement savings.
Now, here’s where it gets interesting. Starting in 2025, if you’re between 60 and 63, a new “super catch-up” rule under SECURE Act 2.0 will let you contribute even more [3]. This means you can contribute up to $10,000 or 150% of the standard age 50+ catch-up limit, whichever is higher. With the 2024 limit at $7,500, the 2025 super catch-up will be $11,250. Just keep in mind that not all employers may offer this feature, so check with your plan provider [4]. This new option is a game-changer for those looking to supercharge their savings as they near retirement.
IRA Limit Increases
Individual Retirement Accounts (IRAs) will also see an increase. The new contribution limit for IRAs is $7,000, a modest bump from 2024’s $6,500. Although IRAs typically have lower limits than 401(k)s, they’re versatile, allowing both Traditional (tax-deferred) and Roth (tax-free withdrawals) options.
Catch-Up Contributions for Ages 50+ in IRAs
If you’re 50 or older, you can still take advantage of the $1,000 catch-up contribution for IRAs, pushing your total limit to $8,000. This allows older savers to maximize the tax benefits of their retirement accounts and better prepare for the future.
Phase-Out Adjustments:
In 2025, the income phase-out range for Roth IRA contributions is going up to $150,000-$165,000 for individuals (up from $146,000-$161,000 in 2024). For married couples filing jointly, the range will jump to $236,000-$246,000 from $230,000-$240,000 [5]. This means more people might qualify to contribute to Roth IRAs, opening the door to more tax-free growth potential.
Traditional IRAs still require you to have earned income, and you can’t contribute more than you earn in a year. While there aren’t income gaps for contributing, the ability to deduct contributions phases out based on factors like your income, filing status, and if you or your spouse is covered by a workplace plan. In 2025, single filers covered by a workplace plan will see their phase-out range move to $79,000-$89,000 (up from $77,000-$87,000). For married couples filing jointly, it’s shifting to $126,000-$146,000, compared to $123,000-$143,000 in 2024 [6]. These tweaks help more people optimize their retirement savings and potential and tax benefits.
What These Changes Mean for You
These increases are designed to help Americans save efficiently, especially as they near retirement. Even small annual adjustments in contribution limits can significantly impact the growth of your retirement fund over time, thanks to compound interest. For example, maximizing your 401(k) and IRA contributions can provide more substantial tax benefits and help you build a larger nest egg.
How to Take Advantage of These Limit Increases
If you’re new to retirement accounts, increasing your contributions might feel like a stretch. But consider small steps to make the most of your individual situation.
1. Start early
Even if you can’t max out your contributions, it’s important to start saving what you can as early as possible. That’s because more time in the market allows your investments longer to grow and take advantage of compound interest. You might be able to put away more money in the future, but you can’t get more time.
2. Take advantage of an employer match
Many experts call employer 401(k) matching contributions “free money,” because you don’t have to put in any extra work to earn them. If your employer offers a match on 401(k) contributions, aim to contribute at least enough to qualify for the full match.
3. Plan annual increases
Gradually increasing your contribution percentage each year—even by just 1%—can help you take advantage of the new limits without putting too much strain on your budget. This simple step can make a big difference in building your retirement savings over time.
4. Consider automatic transfers
401(k) contributions come out of your paycheck before taxes. For IRA contributions, though, think about setting up automatic transfers each month to make sure you’re consistently contributing. This can help you take full advantage of the new annual limit without scrambling at the end of the year.
5. Check if you qualify for the Saver’s Credit
Americans with lower and middle incomes who contribute to a retirement plan can claim the Saver’s Credit on their federal tax return, which could lower their tax bill. However, not everyone qualifies. Here are the new income limits for claiming the Saver’s Credit in 2025 [7].
- $79,000 for married couples filing jointly (up from $76,500)
- $59,250 for heads of household (up from $57,375)
- $39,500 for single and married taxpayers filing separately (up from $38,250)
Final Thoughts: Boost Your Retirement Savings in 2025
With higher contribution limits coming in 2025, it’s a great opportunity to boost your retirement savings. Whether you’re just starting out or nearing retirement, taking advantage of these changes can help secure your financial future. Even small steps, like increasing your contributions by 1%, can have big impact over time. Setting up automatic transfers or adjusting your 401(k) contributions can make these changes easier to manage. Remember, small efforts today can lead to a more comfortable and secure future–your future self will thank you!
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