Important Retirement Savings Changes Coming in 2025

Korey Knepper |
Categories
Education
Retirement

Exciting updates are on the horizon for retirement savers in 2025! Thanks to the Secure Act 2.0, there are significant changes ahead for catch-up contributions and contribution limits. Each year, the IRS also adjusts these limits to keep pace with inflation, and 2025 is no exception. Here’s what you need to know about the key changes.

Changes to Employer-Sponsored Plans

  • Contribution Limit Increase: The contribution limit for employer-sponsored plans will rise from $23,000 in 2024 to $23,500 in 2025.
  • Catch-Up Contributions: For individuals aged 60-63, catch-up contributions will jump to $11,250—a substantial increase from the previous limit of $7,500. For those over 50 but not within the 60-63 age range, the catch-up contribution limit remains at $7,500.

Changes to IRAs

  • Contribution Limits: There will be no change to the contribution limits for IRAs or Roth IRAs. However, there are adjustments to the income limits for Roth IRAs:
    • For married couples filing jointly, the phase-out range will increase from $230,000 - $240,000 to $236,000 – $246,000, based on Modified Adjusted Gross Income (MAGI).
    • For single filers, the limits will rise from $146,000 - $161,000 in 2024 to $150,000 - $165,000 in 2025.

Changes to SIMPLE IRAs

  • Contribution Limit Increase: The contribution limit for SIMPLE IRAs will increase from $16,000 to $16,500 in 2025.
  • Catch-Up Contributions: For savers aged 60-63, the catch-up contribution limit will increase from $3,850 to $5,250.

If you have questions about how these changes may impact your retirement plan, don’t hesitate to set up a call with us today!