The Internal Revenue Service (IRS) has revealed modifications to the retirement plan contribution limits for the 2025 tax season. These changes are intended to assist millions of Americans in increasing their retirement savings. The yearly contribution cap for 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan has risen from $23,000 to $23,500.
Workers aged 50 and above can make additional catch-up contributions of up to $7,500, bringing their total allowable contributions in 2025 to $31,000. Additionally, a new “super catch-up contribution” cap has been established for individuals aged 60 to 63, enabling them to add an extra $11,250 beyond their standard contributions.
Increased retirement contribution limits explained
Richard Pon, a certified public accountant, notes, “Individuals aged 60 to 63 should take swift action to optimize their retirement savings.
The IRS has also modified the income thresholds for traditional and Roth IRA contributions. For individual taxpayers who are part of a workplace retirement scheme, the phase-out income range for IRA contributions now extends from $79,000 to $89,000.
For married couples filing jointly, the income range is now set at $126,000 to $146,000. The income phase-out range for Roth IRA contributions is defined as $150,000 to $165,000 for single taxpayers and heads of household, and $236,000 to $246,000 for married filing jointly. Furthermore, the income limit for the Saver’s Credit, which aids low- and moderate-income earners in saving for retirement, has been adjusted to $79,000 for married couples filing together.
The IRS continues to uphold the annual contribution limit for Individual Retirement Accounts (IRAs) at $7,000 for 2025, while maintaining a catch-up contribution limit of $1,000 for those aged 50 and older. These adjustments offer an opportunity for Americans, particularly older individuals approaching retirement, to bolster their financial security through enhanced retirement savings.
