Recently, the Treasury Department announced figures for retirement account savings for 2025; 401(k) contribution limits are up, along with most other retirement savings vehicles, yet traditional IRA contribution limits stay the same.

For more information, contact Ryan Smith at rsmith@dopkins.com.

Here is a breakdown of each plan’s new contribution limits:

401(k)s:

The annual contribution limit for employees who participate in 401(k), 403(b), most 457 plans and the federal government’s Thrift Savings Plan is $23,500 for 2025—a $500 boost over 2024. Furthermore, you can make changes to your 401(k) election at any time during the year, not just during open enrollment season when most employers send you a reminder to update your elections for the next plan year.

The 401(k) Catch-Up:

The catch-up contribution limit for employees age 50 or older in these plans is $7,500 for 2025. Even if you don’t turn 50 until December 31, 2025, you can make the additional $7,500 catch-up contribution for the year. There is also a special catch up for those ages 60 through 63 which is $11,250 instead of the $7,500 catch-up; not in addition to.

After-tax 401(k) contributions:

If your employer allows after-tax contributions to your 401(k), you also get the advantage of the $70,000 limit for 2025. It’s an overall cap, including your $23,500 (pretax or Roth in any combination) salary deferrals plus any employer contributions if they are after-tax (but not catch-up contributions).

Individual Retirement Accounts:

The limit on annual contributions to an Individual Retirement Account (pretax or Roth or a combination) remains at $7,000 for 2025, the same as in 2024. The catch-up contribution limit, which is not subject to inflation adjustments, remains at $1,000. (Remember that 2024 IRA contributions can be made until April 15, 2025.)

So, theoretically, the 50 or older super saver can save $39,000 by combining contributions to both a 401(k) and an IRA. Those 60 – 63 can save up to a combined $42,750. Additionally, if the employer allows after-tax contributions or you are self-employed, you can save even more. The overall defined contribution plan limit moves up to $70,000, from $69,000. Of course, you should always consult a professional regarding the deductibility of contributions.

In 2025, there will be more room to save now with these increased contribution limits, and it should be taken advantage of for optimal investing. With the new contribution limits, there should be even more enthusiasm to sock away as much as you can to achieve your investment goals. Please reach out to your advisors at Dopkins Wealth Management with any questions.

* Dopkins Wealth Management, LLC is a registered investment advisor owned by the partners of Dopkins & Company, LLP.  

Source: IRS.
For informational and educational purposes only. Should not be construed as specific investment, accounting, legal, or tax advice. Certain information is based on third party data and may become outdated or otherwise superseded without notice. Third party information is deemed to be reliable, but its accuracy and completeness cannot be guaranteed. Neither the Securities and Exchange Commission (SEC) nor any other federal or state agency have approved, determined the accuracy, or confirmed the adequacy of the information presented. R-24-7891.

About the Author

Ryan C. Smith CFP®

Ryan provides financial solutions to individuals, trusts and businesses. His services include guidance to clients regarding financial planning, investments and portfolio analysis.