For 2025, don’t forget to adjust your 401k/403b contribution limits. For those clients who are 60-63 and still working, there is good news for additional Catch-up Contributions you can make to Employer Retirement Plans (401k, 403b etc.) in 2025.
2025 401k contribution limits:
Everyone (who has access to a 401k/403b) can contribute $23,500 in 2025 (up from $23k in 2024).
For those over 50, you can make a catch-up contribution of $7,500= total of $31,000.
For those who are 60-63, you can make a larger catch-up contribution of $11,250 (instead of $7,500)= total of $34,750
**In 2026, there will be new rules for the catch-up contributions for certain higher income employees. We will address that at the end of 2025, to avoid confusion for 2025.
For those who don’t have access to a 401k/403b, the contribution limits for other retirement plans are as follows.
IRA contribution limits* (for IRA and Roth IRA) remain at:
$7k + $1k catch up (for those over 50)
*there are income limits to making IRA contributions. The specifics can be found here: https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000
SIMPLE IRAs (“Savings Incentive Match Plan for Employees”) for Small Businesses
$16,500 + $3.5k catch up (for those over 50) OR $5,250 (for those age 60-63) (*under certain plans, you may be able to contribute more)
*Due to the Secure Act 2.0, if the employer chooses, employees may be able to contribute an additional 10% on top of the existing limits, so long as the employer has less than 25 employees or has 26 to 100 employees and agrees to a 4% employer match or 3% nonelective contribution. SIMPLE IRAs also have a separate contribution limit for employers. You can read more specific rules here: https://www.fidelity.com/learning-center/smart-money/simple-ira-contribution-limits