Source: The College Investor
Key Points
- The IRS announced that 401k elective contributions will increase by $500 to $23,500 for 2025
- The IRA contribution limits will remain the same in 2025
- Starting in 2025, there will be a new "higher" catch-up contribution amount for individuals aged 60 to 63
The Internal Revenue Service announced today an increase in the amount individuals can contribute to their 401(k) plans for 2025. The contribution limit has been raised to $23,500, up from $23,000 in 2024. However, the IRA contribution limit will remain the same at $7,000.
Income limits for traditional IRA contributions did increase, along with the overall contribution limit for 401k and 403b plans.
Data: Notice 2024-80. Source: The College Investor
As you can see, the limit increased by $500 for elective contributions, and $1,000 for overall contributions, compared to 2024.
A big change for 2025 is the new, higher, catch-up contribution limits. For individuals aged 50 and older, the catch-up amount is still $7,500. But, for individuals ages 60-63, a new higher limit of $11,250 takes effect.
IRA Contribution Limits
Here are the IRA contribution limits for 2025:
Data: IRS Notice 2024-80. Source: The College Investor
The contribution limits remained unchanged, but he income phase-outs for contributions to Roth and Traditional IRAs did increase in 2025.
You can find the full IRA contribution and income limits here.
Other Limits And Tax Due Dates
There were also increases in the amount you can contribute to your 403b or 457 plan.
Earlier this year, the IRS had already announced higher contribution limits to Health Savings Accounts.
And last week the IRS announced higher tax brackets for 2025.
Remember, these higher limits don't take effect until 2025. However, given it's open enrollment season, this can be a good time to think about what you what your elective contributions to be starting in January.
And for things like IRA contributions, you have all the way until the April 15 tax deadline to make your contributions. Learn more about the various tax deadlines here.
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Robert Farrington is America’s Millennial Money Expert® and America’s Student Loan Debt Expert™, and the founder of The College Investor, a personal finance site dedicated to helping millennials escape student loan debt to start investing and building wealth for the future. You can learn more about him on the About Page or on his personal site RobertFarrington.com.
He regularly writes about investing, student loan debt, and general personal finance topics geared toward anyone wanting to earn more, get out of debt, and start building wealth for the future.
He has been quoted in major publications, including the New York Times, Wall Street Journal, Washington Post, ABC, NBC, Today, and more. He is also a regular contributor to Forbes.
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