The IRS has announced updated contribution limits for various retirement savings plans for 2025, allowing workers to set aside more money in some cases through both employer-sponsored plans and individual accounts.
As part of broader adjustments meant to keep pace with inflation, employees enrolled in 401(k), 403(b), and governmental 457 plans and the federal government’s Thrift Savings Plan will be able to contribute up to $23,500 next year, up from $23,000 in 2024, as outlined in a Nov. 1 statement.
For workers aged 50 and older, who are eligible for “catch-up” contributions, the additional contribution limit will remain at $7,500 in 2025. This means that participants aged 50 and older enrolled in most 401(k), 403(b), and governmental 457 plans and the federal government’s Thrift Savings Plan can contribute up to $31,000 annually. However, a provision in the SECURE 2.0 Act introduces a higher catch-up contribution limit for employees aged 60 to 63. For these individuals, the catch-up limit in 2025 will be $11,250, rather than the standard $7,500, providing them with additional opportunities to boost their retirement savings….