2025 Retirement Contribution Limits

Saving for retirement remains one of the most effective long-term tax strategies — and in 2025, the IRS has made key updates to contribution limits for workplace and individual retirement plans. These increases offer more opportunity to reduce your taxable income while preparing for the future.

New Contribution Limits for 2025

• 401(k), 403(b), and most 457 plans: $23,500 (up from $23,000 in 2024)

• Catch-up contribution (age 50+): $7,500 — unchanged

• Total limit with catch-up (age 50+): $31,000

• Traditional & Roth IRA: $7,000 (unchanged from 2024)

• IRA Catch-up (age 50+): $1,000 — total $8,000

Who Should Pay Attention?

• Employees contributing through employer-sponsored retirement plans (401(k), 403(b))

• Self-employed individuals using solo 401(k) or SEP IRA accounts

• Anyone age 50+ who qualifies for additional catch-up savings

• Clients doing Roth vs. Traditional tax planning

Planning Tip

Maxing out your 401(k) contributions can reduce your taxable income, while Roth IRA contributions can provide tax-free income later. Not sure which strategy is best for you in 2025? A quick analysis can help you choose based on income, age, and filing status.

Action Steps

• Update your payroll deferral settings before year-end

• Re-evaluate IRA contributions if your income changed in 2025

• Take advantage of both 401(k) and IRA if eligible

Not sure if you're saving enough — or in the right type of account? Schedule a review with our team to optimize your retirement savings strategy.

Source: IRS – 401(k) and IRA Limit Updates for 2025