2025 401(k) and IRA Contribution Limits: What You Need to Know
Peter Reagan

Every year, the IRS adjusts retirement contribution limits to account for inflation and changes in the economic landscape. In 2025, workers saving for retirement will see increased contribution limits for 401(k)s, IRAs, and other tax-advantaged retirement accounts. Understanding these changes is crucial to maximizing your savings and securing your financial future. 

One major change this year: SECURE 2.0 created a higher catch-up contribution limit for employees aged 60-63 who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan (TSP). For 2025, this higher catch-up contribution limit is $11,250.

Note that the figures below include not only the 2025 retirement plan contribution limits, but also the 2024 limits as well. If you're saving for retirement today, you can allocate current contributions to either the 2024 or 2025 tax years right up until tax day, April 15, 2025. 

2025 contribution limits for 401(k), 403(b), 457 and TSPplans

For those with employer-sponsored retirement plans, such as 401(k), 403(b), and most 457 plans, the new contribution limit for 2025 is $23,500, up from $23,000 in 2024.

If you’re age 50 or older, you can take advantage of catch-up contributions, which allow you to contribute an additional $7,500, bringing the total limit to $31,000 for the year. 

Note that employer contributions are also limited (for those workers fortunate enough to have an employer matching or otherwise contributing their 401(k), 403(b) or 457 retirement plans). 

The combined total of employee and employer contributions cannot exceed $69,000 (plus relevant catch-up amounts where applicable). 

Key takeaways for 2025 401(k), 403(b) and 457 contribution limits:

With super catch-up (workers aged 60-63): $111,250

2025 Individual Retirement Account (IRA) contribution limits

For those saving in an Individual Retirement Account (IRA), the contribution limit for 2025 is $7,000.

If you are 50 or older, you can make a catch-up contribution of an additional $1,000, bringing your total to $8,000.

Key takeaways:

• Traditional & Roth IRA contribution Limit: $7,000
• Catch-up contribution (50+): $1,000
• Total contribution limit (50+): $8,000
• Note: The IRS does not consider Traditional and Roth IRA contributions separately. You can contribute a total of $7,000 ($8,000 if aged 50+) across any number of Traditional and Roth IRA accounts.

Income limits for Roth IRA contributions in 2025

Roth IRAs come with income restrictions that determine eligibility to contribute the full amount. The income phase-out ranges for 2025 are:

• Single Filers: $146,000 - $161,000
• Married Filing Jointly: $230,000 - $240,000

If your income exceeds these limits, you may be restricted from directly contributing to a Roth IRA but may still explore the Backdoor Roth IRA strategy.

SEP & SIMPLE IRA contribution limits for 2025

For self-employed individuals and small business owners, SEP IRAs and SIMPLE IRAs offer a way to save for retirement while benefiting from tax advantages.

A Savings Incentive Match Plan for Employees (SIMPLE) IRA is another employer-sponsored retirement account. A SIMPLE IRA is often used by smaller employers. Contribution limits for a SIMPLE IRA tend to be lower than a 401(k) or similar employer-sponsored plan.

SIMPLE IRA 2025 contribution limits:

• Employee contribution limit: $16,500 (up from $16,000 in 2024)
• Catch-up contribution (50+): $3,850
• New for 2025, a super catch-up contribution for workers aged 60-63: $5,250

A Simplified Employee Pension (SEP) IRA lets an employer contribute funds to a traditional IRA on behalf of their employees. (This is also used as a retirement savings plan for self-employed individuals.) In a SEP, the employee doesn’t make contributions. Only the employer makes contributions, directly to the employee's retirement account. 

SEP IRA 2025 contribution limits:

• The smaller of: 
• 25% of eligible employee's compensation
• $70,000

Maximizing your retirement savings in 2025

With these new contribution limits, 2025 is a great year to increase your retirement savings. Whether you contribute to a 401(k), IRA, SEP IRA, or SIMPLE IRA, taking full advantage of these tax-advantaged accounts can significantly enhance your long-term financial security.

Key strategies to consider:

• Max out contributions if possible to leverage tax-deferred or tax-free growth 
• Didn't max out your IRA in 2024? You can still contribute to your Roth or Traditional IRA for the 2024 year if you make your contribution before April 15, 2025
• Take advantage of any employer matching contributions in your 401(k) to avoid leaving free money on the table
• Consider a Roth conversion if your income allows for it, especially if you anticipate higher tax rates in the future
• Make sure you don't over-contribute to your retirement savings
• Diversify your retirement savings across different asset classes as well as across different types of accounts (to hedge against future tax changes) 

Start planning today

The earlier you start saving, the better your financial future will look. With increased contribution limits in 2025, now is the perfect time to review your retirement strategy and ensure you're making the most of these tax-advantaged opportunities. 

For more insights on protecting your retirement savings, including so-called "alternative assets"like a Gold IRA, explore how physical precious metals can help insulate your savings from inflation and economic uncertainty. 

Remember, IRS guidelines regarding retirement accounts and contribution limits are subject to change! Be sure to check the current IRS guidelines regarding updates to retirement-related policies, or work with a tax planner to help you make wise decisions.

 

 

Peter Reagan is a financial market strategist at Birch Gold Group. As the Precious Metal IRA Specialists, Birch Gold helps Americans protect their retirement savings with physical gold and silver.

 

 

 

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