2025 U.S. Retirement Account Contribution Limits
- Bigger Reward
- Dec 15, 2024
- 3 min read
Updated: Jan 11
401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000 and more 2025 U.S. Retirement account contribution limits for 2025 tax year.
The IRS has announced increased contribution limits for retirement accounts in 2025, continuing the trend of adjustments for inflation. This guide covers the key changes and limits for various retirement savings vehicles.
Traditional and Roth IRA Contribution Limits
The maximum contribution limit for both Traditional and Roth IRAs has increased to $7,000 for 2025. For individuals aged 50 and older, the catch-up contribution remains at $1,000, bringing their total contribution limit to $8,000.
IRA Income Limits
For Roth IRA contributions, phase-out ranges have been adjusted:
Single filers and heads of household:
2025 $150,000 to $165,000
2024 $146,000 to $161,000
Married filing jointly:
2025 $236,000 to $246,000
2024 $230,000 to $240,000
Married filing separately:
2025 $0 to $10,000
2024 $0 to $10,000
For Traditional IRA deductibility (if covered by a workplace retirement plan):
Single filers and heads of household:
2025 $79,000-$89,000
2024 $77,000 to $87,000
Married filing jointly:
2025 $236,000-$246,000
2024 $123,000 to $143,000
Married filing separately:
2025 $0 to $10,000
2024 $0 to $10,000
401(k), 403(b), and 457 Plans
The contribution limit for employees who participate in 401(k), 403(b), and most 457 plans has increased to $23,500 up from $23,000. Workers aged 50 and older can make catch-up contributions of $7,500, bringing their total contribution limit to $31,000.
For employees aged 60, 61, 62 and 63 a higher catch-up contribution contribution limit is $11,250 instead of $7,500 which would bring their total to $34,750 for 2025.
Note: 401(k) plans is an employer sponsored plans for employees, 403(b) plans are for teachers, and 457 plans are for government employees.
Combined Employer/Employee Contribution Limits
The total combined employer and employee contribution limit has increased to $69,000, or $76,500 for those aged 50 and older.
SIMPLE IRA Plans
SIMPLE IRA contribution limits have increased to $16,000 for 2025. The catch-up contribution limit for participants aged 50 and older is $3,500, bringing their total limit to $19,500.
SEP-IRA Plans
For SEP-IRAs, employers can contribute up to $70,000 or 25% of an employee's compensation, whichever is lower. The maximum compensation for SEP-IRA in 2025 $350,000.
Definition: SEP-IRA stands for Simplified Employee Pension Individual Retirement Account. It's a retirement plan used by small business owners and the self-employed to provide retirement benefits for themselves and their employees.
Health Savings Accounts (HSAs)
While not strictly retirement accounts, Health Savings Accounts (HSAs) can function as additional retirement savings vehicles.
The 2025 contribution limits are:
Individual contribution limit is $4,300 for 2025
Family contribution limit is $8,550 for 2025
Catch-up contributions for individuals aged 55 and older is $1,000 to their HSA
Important Considerations
Contribution limits apply to the total of all accounts of the same type. For example, if you have multiple 401(k) accounts, your total contributions across all accounts cannot exceed the annual limit.
Employer matching contributions don't count toward your individual contribution limits but do count toward the combined employer/employee limits.
Income limits and phase-outs may affect your ability to contribute to certain accounts or deduct contributions.
Some workplace plans may have lower limits based on plan rules or discrimination testing.
Planning Tips
Consider maximizing contributions early in the year to take advantage of potential market growth and dollar-cost averaging.
Review your contribution strategy if you're age 50 or older to take advantage of catch-up contributions.
Evaluate whether traditional or Roth contributions are more advantageous based on your current and expected future tax situation.
Coordinate with your spouse if married to maximize household retirement savings.
Consider diversifying across different types of retirement accounts to provide tax flexibility in retirement.
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