2025 Retirement Contribution Limits: What You Need to Know

Each year, the IRS updates contribution limits for retirement savings accounts. For 2025, the changes include a new “super” catch-up contribution for individuals aged 60 to 63.

Staying informed about these changes can help you maximize your savings and make the most of your retirement contributions. Here’s what’s new for 2025 and why these changes matter.

Why Ages 60 to 63?

The SECURE 2.0 Act introduced this super catch-up specifically for people between 60 and 63 because these are critical pre-retirement years. Many people in this age group are in their highest-earning years and have fewer financial obligations, making it an ideal time to maximize retirement savings before they stop working.

This provision acknowledges that some individuals may not have saved enough earlier in their careers, giving them the opportunity to accelerate their savings before retirement.

401(k), 403(b), and 457 Plans Contribution Limits

For those with employer-sponsored retirement accounts, such as 401(k), 403(b), and 457 plans, the standard contribution limit for 2025 is $23,500.

  • Catch-up contribution for those 50 and older: $7,500.

  • New catch-up contribution for those 60-63: $11,250.

This means individuals aged 60 to 63 can contribute a total of $34,750 in 2025.

IRA Contribution Limits

For 2025, the contribution limit for individual retirement accounts (IRAs) is $7,000. If you’re 50 or older, you can make an additional $1,000 catch-up contribution, bringing your total contribution to $8,000 for the year.

Income Limits for Traditional IRA Deductions

If you’re covered by a workplace retirement plan, the amount of your traditional IRA contribution that you can deduct depends on your income:

  • Single filers: Phase-out range is $79,000 to $89,000.

  • Married, filing jointly (if the contributing spouse is covered by a retirement plan at work): Phase-out range is $126,000 to $146,000.

  • Married, filing jointly (if the contributing spouse is not covered by a retirement plan at work): Phase-out range is $236,000 to $246,000.

Roth IRA Contribution Limits

The ability to contribute to a Roth IRA is based on income:

  • Single filers: Phase-out range is $150,000 to $165,000.

  • Married, filing jointly: Phase-out range is $236,000 to $246,000.

Tip: If your income is too high to contribute directly to a Roth IRA, you may want to consider a backdoor Roth IRA. This involves making a nondeductible traditional IRA contribution and then converting it to a Roth IRA.

SIMPLE IRA Contribution Limits

Small businesses often use the SIMPLE IRA (Savings Incentive Match Plan for Employees) to offer retirement benefits. In 2025, the contribution limits are:

  • Regular contribution: $16,500.

  • Catch-up contribution for those 50 and older: $3,500.

  • Special catch-up for those 60, 61, 62, or 63: $5,250.

Other Key Considerations

Employer Adoption of the New Limits

While the IRS allows these increased contributions, not all employers automatically implement them in their retirement plans. If you want to take advantage of the higher limits, check with your employer or plan administrator to ensure your plan supports these changes.

Mandatory Roth Catch-Up Contributions for High Earners

Starting next year, in 2026, individuals earning over $145,000 in the previous year will be required to make all catch-up contributions as Roth contributions (after-tax). This means taxes are paid upfront, but withdrawals in retirement will be tax-free.

Maximizing Your Contributions

Deciding how much to contribute requires careful planning. While maxing out your contributions can be beneficial, it’s important to consider:

  • Your current financial needs and expenses.

  • Other investment opportunities.

  • Your tax situation (pre-tax vs. Roth contributions).

  • How these contributions fit into your overall retirement strategy.

Tip: Working with a fiduciary financial advisor can help you determine the best contribution strategy based on your income, tax situation, and retirement goals.

Final Thoughts

The updated 2025 retirement contribution limits offer more opportunities to save, especially for those approaching retirement. The new super catch-up provision for ages 60-63 provides a unique chance to boost savings during key pre-retirement years.

Taking full advantage of these limits requires planning and a solid understanding of your financial situation. Consider speaking with a fiduciary financial advisor to help ensure your contributions align with your long-term retirement goals.

Schedule a complimentary consultation with one of our fiduciary, fee-only financial planners to discuss your personal situation.

This material was written in collaboration with artificial intelligence (ChatGPT) derived from sources believed to be accurate. This information should not be construed as investment, tax, or legal advice.