As we approach the holiday season and look ahead to the new year, we wanted to be sure to share with you the updated IRS limits for 2025.
Please navigate to the Resources heading above for a summary of the updated limits for 2025, which include increased contribution opportunities for your 401(k), 403b, IRAs, and other retirement accounts. These updates can provide a valuable opportunity to save more for retirement while taking advantage of additional tax benefits. Please review the attached document for an overview of the updated limits and confirm with your payroll providers that they are aware of the updates. If you have any questions or would like to discuss how these changes might impact your participant’s or personal retirement strategies, please reach out. We would be happy to assist in making the most of these updates as you plan for a successful 2025.
Here are a few key updates for 2025:
- Employee Contribution Limit: The maximum amount you can contribute as an employee is up to $23,500 (from $23,000 in 2024).
- Catch-Up Contributions: Individuals aged 50 or older in 2025 can contribute an additional $7,500, bringing the total contribution to $31,000 (up from $30,500 in 2024).
- **Super Catch-Up Contributions: New in 2025 Individuals aged 60 to 63 in 2025 will be eligible for a higher Catch-Up limit of $11,250. This contribution is only for individuals turning age 60 to 63 in 2025.
- Traditional and Roth IRA Contribution and Catch Up Limits remain unchanged. The contribution limits for both traditional and Roth IRAs remain at $7,000 and Catch-Up Contributions for those aged 50 and older remains at $1,000.
- Highly Compensated Employee (HCE) Limits: Individuals that earned over $155,000 in 2024 will be HCE in 2025. Individuals earnings more than $160,000 in 2025 will be HCE in 2026.
- **2026 Roth Catch-Up Rule: We will continue to speak to this over the 2025 plan year, but please note that effective January 1, 2026 (as it reads today), any Catch-Up eligible employee who made over $145,000 in 2025 will be required to make their Catch-Up contributions in 2026 as Roth contributions.
Wishing you all a safe and restful holiday season and a prosperous 2025!