2025 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $22,500 to $23,000. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution of $7,500 a year. For ages 60 – 63, there is an additional higher catch-up contribution of $3,750 making the limit $11,250 instead of $7,500.
2024
2025
Under Age 50 Contribution Limit
$23,000
$23,500
Over Age 50 Contribution Limit
$30,000
$30,500
The 2025 contribution limits for an IRA or Roth IRA will remain the same at $7,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2025 Traditional IRA AGI Limits:
Single or Head of Household: $79,000 – $89,000
Married Filing Jointly (and you’re covered by a retirement plan at work) $126,000 -$146,000
Married Filing Jointly (and your spouse is covered by a retirement plan at work) $236,000 -$246,000
Married Filing Separately: $0 – $10,000
2025 Roth IRA AGI limits:
Single or Head of Household: $150,000 – $165,000
Married Filing Jointly: $236,000 – $246,000
Married Filing Separately: $0 – $10,000
2025 SIMPLE IRA Contribution limits:
For aged under 50, the deferral has increased from $16,000 to $16,500
For aged 50 and over, the deferral is $3,500. A higher catch-up limit of $5,250 applies for ages 60 – 63.
2025 SEP IRA Contribution limits:
The maximum deferral has increased from $69,000 to $70,000
The minimum compensation amount is $750
Defined Contribution Plans –
The 2025 defined contribution plan funding has increased from $69,000 to $70,000.
Defined Benefit Plans –
The 2025 limitation on the annual benefit has increased from $275,000 to $280,000.
Health Care Savings Accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2025, a single taxpayer can contribute $4,300 and family coverage is $8,550. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2025:
The 2025 per beneficiary gift-tax exclusion has increased from $18,000 to $19,000.
The gift and estate tax lifetime exclusion has increased from $13,610,000 to $13,990,000.
Gifts to a non-U.S. citizen spouse has increased from $185,000 to $190,000.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Information sourced from Internal Revenue Service. (2024). Notice 2024-80, 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living. Retrieved from https://www.irs.gov/pub/irs-drop/n-24-80.pdf.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.
< COMMENTARY
Updates | January 14, 2025
2025 Retirement Account Updates
By Kenneth J. Dean CPA, CFP®, CFA, MST
Senior Director, Financial Planning
Qualified Accounts
2025 contribution limits for your 401(k), 403(b), or a 457 plan have increased from $22,500 to $23,000. Additionally, if you are age 50 or older, you are eligible for a “catch-up” contribution of $7,500 a year. For ages 60 – 63, there is an additional higher catch-up contribution of $3,750 making the limit $11,250 instead of $7,500.
The 2025 contribution limits for an IRA or Roth IRA will remain the same at $7,000, plus a $1,000 catch-up contribution for individuals over age 50. Contributions to an IRA can be tax deductible if you do not have a qualified plan, regardless of your Adjusted Gross Income (AGI). However, if you (or your spouse) are eligible for a qualified plan, your contribution may be deductible based on the following AGI amounts:
2025 Traditional IRA AGI Limits:
2025 Roth IRA AGI limits:
2025 SIMPLE IRA Contribution limits:
2025 SEP IRA Contribution limits:
Defined Contribution Plans –
The 2025 defined contribution plan funding has increased from $69,000 to $70,000.
Defined Benefit Plans –
The 2025 limitation on the annual benefit has increased from $275,000 to $280,000.
Health Care Savings Accounts (HSA) –
If you have a high-deductible health insurance plan, you are eligible to contribute to an HSA. For 2025, a single taxpayer can contribute $4,300 and family coverage is $8,550. In addition, there is a catch-up contribution of $1,000 for anyone who is age 55 or older.
Gift and Estate Tax Changes for 2025:
The 2025 per beneficiary gift-tax exclusion has increased from $18,000 to $19,000.
The gift and estate tax lifetime exclusion has increased from $13,610,000 to $13,990,000.
Gifts to a non-U.S. citizen spouse has increased from $185,000 to $190,000.
DISCLOSURES
Content in this material is for general information only and not intended to provide specific advice or recommendations for any individual.
Information sourced from Internal Revenue Service. (2024). Notice 2024-80, 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living. Retrieved from https://www.irs.gov/pub/irs-drop/n-24-80.pdf.
This information is not intended to be a substitute for individualized tax advice. We suggest that you discuss your specific tax situation with a qualified tax advisor.
Contributions to a traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.
A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.