Retirement Contribution Limits for 2025

Retirement Contributions Increased

Retirement contribution limits for 2025 have increased once again, giving savers more opportunities to build their nest eggs. These accounts—whether a 401(k), IRA, or SIMPLE IRA—provide valuable tax advantages to help you grow your retirement savings. Below, we’ll break down the updated limits, highlight key changes under the SECURE 2.0 Act, and explain how these updates can enhance your financial future.

Ready to take full advantage of 2025’s contribution limits? Download our updated Retirement Contribution Worksheet for an easy-to-use reference guide that lays out all these limits in one convenient format.

Updated Retirement Plan Contribution Limits for 2025

401(k), 403(b), and 457 Plans

The IRS has increased the contribution limit for 401(k), 403(b), and most 457 plans to $23,500 in 2025 (up from $23,000 in 2024).

For savers aged 50 and older, the catch-up contribution remains at $7,500, meaning you can contribute a total of $31,000 if you meet the age requirement.

A new feature for 2025 is a special “super catch-up” contribution for those aged 60–63. Participants in this age group can contribute an additional $11,250, making their total contribution limit $34,750. This provision offers a great opportunity for near-retirees to maximize savings during their peak earning years.

SIMPLE IRA

The contribution limit for SIMPLE IRAs has increased to $16,500 (up from $16,000 in 2024). Catch-up contributions for those aged 50 and older remain at $3,500, allowing total contributions of $20,000.

Participants aged 60–63, however, are eligible for the new “super catch-up” limit of $5,250, bringing their total potential contributions to $21,750 in 2025. This expanded flexibility makes SIMPLE IRAs even more attractive for small-business owners and employees alike.

SEP IRA

For 2025, employers can contribute up to 25% of an employee’s compensation or a maximum of $70,000, whichever is lower. For self-employed individuals, the contribution limit is typically capped at 20% of net income after accounting for self-employment taxes. The maximum eligible compensation for these calculations has increased to $350,000.

Traditional and Roth IRA

Contribution limits for Traditional IRA and Roth IRA accounts remain the same at $7,000 for 2025. Individuals aged 50 and older can contribute an additional $1,000, bringing their total to $8,000.

However, not everyone qualifies to contribute the maximum to a Roth IRA. For 2025, Roth IRA contribution eligibility phases out for single filers with a Modified Adjusted Gross Income (MAGI) between $150,000 and $165,000, and contributions are prohibited above $165,000. For married couples filing jointly, the phase-out range is $236,000 to $246,000, with contributions prohibited above $246,000 of income.

Keep in mind, Traditional IRAs do not have income limits for contributions, however, tax deductibility may vary based on your income and if you or a spouse are covered by a workplace retirement plan.

Changes Under SECURE 2.0 Act in 2025

Automatic Enrollment for 401(k) Plans

Starting in 2025, new 401(k) plans must automatically enroll employees at a contribution rate of 3% to 10% of their salary. This rate will increase by 1% annually until it reaches between 10% and 15%. While employees can opt out, automatic enrollment and automatic increasing contributions aims to boost participation and savings rates.

Expanded Catch-Up Contributions for Ages 60–63

The SECURE 2.0 Act introduced a special “super catch-up” provisions to allow participants aged 60–63 to contribute even more to their 401(k) or SIMPLE IRA accounts. This change is designed to help individuals in their final working years significantly boost retirement savings.

Saver’s Credit Updates

The income limits for the Saver’s Credit—a tax credit designed to encourage retirement savings—have increased for 2025:

$79,000 for married couples filing jointly (up from $76,500)
$59,250 for heads of household (up from $57,375)
$39,500 for single filers or married individuals filing separately (up from $38,250)

This credit can reduce your tax liability by up to 50% of your contributions to a qualifying retirement account, depending on your income.

Inherited IRA RMD Penalties Take Effect

Starting in 2025, penalties for failing to take Required Minimum Distributions (RMDs) from inherited IRAs will be 25% of the missed distribution amount, reduced to 10% if corrected promptly.

Maximizing Your Retirement Contributions in 2025

With increased retirement contribution limits, enhanced catch-up provisions, and expanded options, there’s no better time to reevaluate your retirement strategy.

Here’s how you can make the most of these 2025 updates:

Review your current contributions and adjust them to align with the new limits.
Take advantage of catch-up provisions, especially if you’re 50+ or in the new 60–63 age group.
Consider SIMPLE IRAs or SEP IRAs if you’re self-employed or a small-business owner.
Plan for automatic 401(k) enrollment if you’re starting a new job with a recently established plan.

Download our 2025 Retirement Contrib u tion Worksheet to see all the updated limits at a glance and plan your savings strategy more effectively.

Staying Ahead of Retirement Savings Trend

As retirement laws evolve, staying informed is key to maximizing your savings and avoiding costly penalties. By keeping track of contribution limits and rule changes, you can optimize your savings and secure a more comfortable future.

Take advantage of the increased limits, special catch-up options, and expanded features for 2025 to grow your nest egg and take control of your financial future.