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401k contribution limits have changed for this year. Take a look at some adjustments to the phase-out ranges and contribution limits for 2025.
The Internal Revenue Service has issued their annual cost of living adjustments for 401(k) and IRAs, Pension plans, and other retirement related matters.
The limits
Individual Retirement Account (Roth and Traditional)
| Contribution Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| IRA Contribution Limit | $7,000 | $7,000 | $6,500 |
| IRA Catch-up Contribution | $1,000 | $1,000 | $1,000 |
What is the impact of these changes?
"This update on 401(k) contribution limits is more than just numbers—it highlights important ways to boost retirement savings as limits increase." - Patrick Darcy
Beyond the ability to save more, here’s how these changes can impact your long-term planning:
401(k), 457 and 403(b)
| Contribution Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| 401(k), 457 and 403(b) maximum annual elective deferral limit | $23,500 | $23,000 | $22,500 |
| 401(k), 457 and 401(b) catch up contribution limit for those 50 and over | $7,500 | $7,500 | $7,500 |
SIMPLE- Savings Incentive Match Plan for Employees
| Contribution Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| SIMPLE employee deferrals | $16,500 | $16,000 | $15,500 |
| SIMPLE catch up deferrals | $3,500 | $3,500 | $3,500 |
Simplified Employee Pension (SEP IRA)
| Contribution Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| SEP annual compensation limit | $350,000 | $345,000 | $330,000 |
| SEP maximum contribution | $70,000 | $69,000 | $66,000 |
Phase-out ranges for 2025
| Traditional IRA MAGI Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| Married filing jointly; a spouse who participates in an employer-sponsored plan | $126,000- $146,000 | $123,000- $143,000 | $116,000- $136,000 |
| Married filing jointly; a spouse who does not participate in an employer-sponsored plan | $236,000- $246,000 | $230,000- $240,000 | $218,000- $228,000 |
| Single or Head of Household | $79,000- $89,000 | $77,000- $87,000 | $73,000- $83,000 |
For Roth IRAs, if your MAGI falls within the applicable range, you can make a partial contribution, but if it exceeds the top of the range, you are not allowed to make a contribution.
| Roth IRA MAGI Limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| Married filing jointly | $236,000- $246,000 | $230,000- $240,000 | $218,000- $228,000 |
| Single or Head of Household | $150,000- $165,000 | $146,000- $161,000 | $138,000- $153,000 |
What is the social security wage base for 2025? Check out our blog, SSA Announces Social Security Wage Base and Benefit Changes for 2025.
| 2025 | 2024 | 2023 | |
|---|---|---|---|
| Social Security Wage Base | $176,100 | $168,600 | $160,020 |
Bear in mind that it’s crucial to stay within the IRS limits—exceeding them can lead to penalties, including a 10% fine and taxes on excess contributions. Individuals with multiple 401(k) plans, perhaps due to job changes, should be especially cautious to avoid inadvertently surpassing the annual limits.
Interested in learning more about tax-advantaged retirement saving strategies?
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