IRS Increases 2025 Retirement Contribution Limits: Key Details

The IRS announced that older taxpayers will see a sizable boost to their 401(k) catch-up contribution limit in 2025 under SECURE 2.0 changes.

The IRS announced (Notice 2024-80, 2024-47 IRB 1) on Nov. 1 that workers between age 60 and 63 will be able to make catch-up contributions of up to $11,250 to 401(k) and 403(b) accounts, as well as some government accounts, in 2025. That represents a 50% increase over the previous $7,500 limit.

Older taxpayers owe the large increase to SECURE 2.0, which was enacted as part of the Consolidated Appropriations Act of 2023. However, the catch-up contribution limit for workers between ages 50 and 59 will stay at $7,500.

The annual contribution limit in 2025 will increase to $23,500 from $23,000 under cost-of-living adjustments to several types of retirement accounts. The contribution limit for individual retirement accounts will remain at $7,000.

Other changes to contribution limits enacted by SECURE 2.0 have generally gone into effect before tax year 2025, including the $17,600 contribution limit for certain SIMPLE retirement accounts and the catch-up limit for employees aged 50 or older for SIMPLE accounts.

The gross income phaseout ranges for deductions for contributions to both IRAs and Roth IRAs will increase under the adjustment in 2025. The Roth IRA phaseout threshold will increase to between $150,000 and $165,000 for singles and heads of household, up from between $146,000 and $161,000, according to the IRS. For married couples filing jointly, the phaseout will be between $236,000 and $246,000, up from between $230,000 and $240,000.

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