On November 1st, the IRS released Notice 2023-75 which provides cost of living adjustments for retirement plans for 2025.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits has increased to $23,500 ($23,000 in 2024). The annual catch-up limitation for employees aged 50 and over remained the same from 2024 at $7,500. Under change made in SECURE 2.0, a higher catch up contribution limit of, $11,250 instead of $7,500 applies to employees aged 60, 61, 62 and 63.
401(k), 403(b), most 457 plans, and Thrift Savings Plan contribution limits has increased to $23,500 ($23,000 in 2024). The annual catch-up limitation for employees aged 50 and over remained the same from 2024 at $7,500. Under change made in SECURE 2.0, a higher catch up contribution limit of, $11,250 instead of $7,500 applies to employees aged 60, 61, 62 and 63.
The annual limitation for SIMPLE retirement accounts increased to $16,500 ($16,000 in 2024) For employees age 50 or over, a $3,5000 catch-up contribution is also allowed (the same from 2024).
Phase out ranges for contributing to IRAs have changed:
The income phase-out range for Roth IRAs has also gone up:
Maximum contribution limits to traditional and Roth IRAs at $7,000 with catch-up contributions for individuals over age 50 of $1,000.
For more information see IRS Retirement topics – Contributions
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Phase out ranges for contributing to IRAs have changed:
- For single taxpayers covered by a workplace retirement plan the phase-out range increased between $79,000 and $89,000 (Between $77,000 and $87,000 in 2024).
- For married couples filing jointly where the IRA contributor is covered by a workplace retirement plan the phase-out range is between $126,000 to $146,000 (Between $126,000 and $143,000 in 2024).
- For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $236,000 and $246,000 (between $230,000 and $240,000 in 2024).
- For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.
The income phase-out range for Roth IRAs has also gone up:
- For single taxpayers the phase-out range is $150,000 to $165,000.
- For head of household the phase-out range is $150,000 to $165,000.
- For married couples filing jointly the phase-out range is $236,000 to $246,000.
Maximum contribution limits to traditional and Roth IRAs at $7,000 with catch-up contributions for individuals over age 50 of $1,000.
For more information see IRS Retirement topics – Contributions
Contact your accountant with any questions and follow us on LinkedIn to stay up to date on all of our posts.
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