It’s official now! IRS announces 401(k) contribution limits for 2025

The annual contribution limit for employees participating in 401(k), 403(b), government 457 plans, and the federal government’s Thrift Savings Plan was increased from $23,000 to $23,500 for 2024.

Capture contributions

The catch-up contribution limit for employees age 50 and older who participate in 401(k), 403(b), government 457 plans, and the federal government’s Thrift Savings Plan remains at $7,500 for 2025. Therefore, participants in most retirement plans ages 50 and over can generally contribute up to $31,000 each year starting in 2025.

With a change in SECURE 2.0, a higher compensation contribution limit It applies to employees ages 60, 61, 62 and 63 who participate in these plans. This higher catch-up contribution limit for 2025 is $11,250 instead of $7,500.

Other highlights in 2025

IRAs: The annual contribution limit to an IRA remains at $7,000. The IRA catch-up contribution limit for individuals age 50 and older was changed to include an annual cost-of-living adjustment under SECURE 2.0 but remains at $1,000 for 2025.

Savings Credit: The income limit for the Savings Credit (also known as the Retirement Savings Contribution Credit) for low- and moderate-income workers is as follows:

• $76,500 to $79,000 for married couples filing jointly;
• $57,375 to $59,250 for heads of household; And
• $39,500 for singles and married individuals filing separately, down from $38,250.

SIMPLE retirement accounts: The amount individuals can contribute to SIMPLE retirement accounts has been increased from $16,000 to $16,500 in 2024.