As we enter the new year, the Treasury Department has announced inflation-adjusted limits for 2025 retirement account savings. How different will your retirement contributions look in 2025?
Let’s take a look…
IRA Contribution Limits remain the same for 2025.
- If you are under age 50 for the whole year, your contribution limit will be $7,000.
- If you are age 50 or older on 12/31/25, your contribution limit will be $8,000.
If you make workplace retirement plan contributions, read on. Contact us if you need assistance calculating a per pay period deferral amount.
SIMPLE-IRA contribution limits have increased $500 for 2025.
- If you are under age 50 for the whole year, your contribution limit will generally be $16,500.
- If you are age 50 or older on 12/31/25, your contribution limit will generally be $20,000.
- If you are age 60, 61, 62, or 63 on 12/31/25, your plan may offer a higher limit of $21,750.
- This optional provision was included in the SECURE 2.0 Act. You will need to check with your employer to see if your plan implemented this change.
- Plans with 25 or fewer employees as well as plans with 26 to 100 employees that meet certain matching or employer contribution provisions may provide a higher contribution limit of $17,600 with higher catch-up limits (ages 50 and older) as well. Check with your employer to see if your plan falls into this category.
401k / 403b / 457b contribution limits have increased $500 for 2025.
- If you are under age 50 for the whole year, your contribution limit will be $23,500.
- If you are age 50 or older on 12/31/25, your contribution limit will generally be $31,000.
- If you are age 60, 61, 62, or 63 on 12/31/25, your plan may offer a higher limit of $34,750.
- This optional provision was included in the SECURE 2.0 Act. You will need to check with your employer to see if your plan implemented this change.
If you contribute the maximum amount to your 401k / 403b / 457b, please make sure to adjust your 2025 contribution amount prior to your first paycheck in 2025.
We recommend that you contribute evenly throughout the year to maximize your company match, unless your company Trues-Up your contribution (not common)). If you maximize your contributions prior to the end of the year, you could miss out on the employer match for the remainder of the year.
To maximize your contribution for 2025, your per pay period deferral will be as follows:
If you can elect a $ amount 401k contribution per pay period that is obviously the easiest. If you need help calculating a percentage contribution limit, please let us know.
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Bartley Financial has an experienced team of CPAs and CFPs® (Certified Financial Planners®) dedicated to helping clients manage their investment portfolios, plan for retirement, strategize taxes, or execute any other initiatives in pursuit of optimum financial health and minimal financial stress. From our offices in Andover, MA, and Bedford, NH, we work to ease clients’ financial concerns, strengthen their portfolios, and assuage their worry that they don’t know what they don’t know.
Contact us today to begin a relationship with a team of knowledgeable, trustworthy professionals who put their clients first.
By Joanne Tackes
Joanne is a Certified Public Accountant and Financial Planner on our team who believes that no financial decision should be made without knowledge of the tax consequences. Her methodical approach to financial planning leaves no stone unturned as she works diligently to provide you with a comprehensive financial plan.
