What We Need to Know About 2025 Retirement Contribution Limits

For those contributing to 401(k) plans, as well as 403(b), most 457 plans, and the federal Thrift Savings Plan, the annual contribution limit will rise to $23,500 in 2025, up from $23,000 in 2024. This adjustment, while slight, allows participants to contribute an extra $500 toward their retirement accounts, adding to the potential for long-term savings growth.

Employee Catch-Up Contributions for Age 50+

The catch-up contribution limit for employees aged 50 or over remains steady at $7,500 for 2025, bringing the total possible contribution to $31,000 for those in this age group. However, for participants between the ages of 60 and 63, there’s an extra boost in savings power. Under the SECURE 2.0 Act, those in this age range can contribute an additional $11,250 as a catch-up, making their total possible contribution $34,750 for the year.

Maximizing Your Savings Strategy

For workers nearing retirement age, these higher catch-up contribution limits offer a valuable opportunity to dump a pile of money into these accounts during critical years leading up to retirement. If you fall within this age range, consider maximizing this limit to accelerate your retirement savings.

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