The Internal Revenue Service (IRS) has announced several adjustments for the 2025 tax year, affecting Individual Retirement Accounts (IRAs) and various group retirement plans. Here’s a comprehensive overview of the key changes and limits for 2025.
2025 Individual Retirement Accounts (IRAs) Contribution Update
For 2025, the IRA contribution limits remain unchanged from 2024:
- Individuals under 50: $7,000
- Individuals 50 and older: $8,000
These limits apply to both traditional and Roth IRAs combined. It’s important to note that while contribution limits haven’t changed, income limits for Roth IRA eligibility have been adjusted:
- Single filers: Phase-out range increased to $150,000 – $165,000
- Married filing jointly: Phase-out range increased to $236,000 – $246,000
2025 Group Retirement Plans – 401(k), 403(b), and 457(b) Plans Contribution Update
The contribution limits for these plans have seen a slight increase for 2025:
- Basic employee contribution limit: $23,500 (up from $23,000 in 2024)
2025 Group Retirement Plan Catch Up Contribution Updates
The catch-up contribution limits vary based on age:
This means that individuals aged 60-63 can contribute up to $34,750 in 2025, while those 50-59 or 64 and older can contribute up to $31,000
2025 Total Group Retirement Plan Contribution Limits
The overall limit for defined contribution plans (including both employee and employer contributions) has increased:
- 2025 limit: $70,000 (up from $69,000 in 2024
Other 2025 Notable Contribution Changes
- Annual compensation limit for calculating contributions: Increased to $350,000 (up from $345,000 in 2024)
- SIMPLE IRA and SIMPLE 401(k) plans: Employee contribution limit increased to $16,000 for 2025
While IRA contribution limits remain stable, group retirement plans have seen modest increases for 2025. The introduction of higher catch-up contribution limits for those aged 60-63 provides an additional opportunity for individuals nearing retirement to boost their savings.
If you need to determine how changing your contributions will impact your retirement plan, schedule a meeting with a financial planner to conduct a retirement income analysis for you.
About the Financial Planning Author
Alexander Langan, J.D, CFBS, serves as the Chief Investment Officer at Langan Financial Group. In this role, he manages investment portfolios, acts as a fiduciary for group retirement plans, and consults with clients regarding their financial goals, risk tolerance, and asset allocation.
With a focus on ERISA Law, Alex graduated cum laude from Widener Commonwealth Law School. He then clerked for the Supreme Court of Pennsylvania and worked in the Legal Office of the Pennsylvania Office of the Budget, where he assisted in directing and advising policy determinations on state and federal tax, administrative law, and contractual issues.
Alex is also passionate about giving back to the community, and has participated in The Foundation of Enhancing Communities’ Emerging Philanthropist Program, volunteers at his church, and serves as a board member of Samara: The Center of Individual & Family Growth. Outside of work and volunteering, Alex enjoys his time with his wife Sarah, and their three children, Rory, Patrick, and Ava.
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Please consult legal or tax professionals for specific information regarding your individual situation.
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