On the heels of releasing the annual inflation adjustments for 2025, the IRS also announced several changes to retirement-related items, including 401(k) limit increases and higher income thresholds for Roth IRA contributions.
For 2025, the amount individuals can contribute to their 401(k) plans will increase to $23,500, up from $23,000 for 2024. This change applies to those participating in 401(k) plans, 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan.
The IRS also revealed that starting in 2025, the 401(k) catch-up contribution limit will remain at $7,500 for participants aged 50 and older. However, under a change made in SECURE 2.0, a higher catch-up contribution limit applies to investors aged 60 to 63. This higher catch-up contribution limit is $11,250 instead of $7,500.
In addition, the IRS announced higher income thresholds for Roth IRA contributions.
For Roth IRA contributions in 2025, the income phase-out range for taxpayers increases to between $150,000 and $165,000 for singles and heads of household, up from between $146,000 and $161,000. For married couples filing jointly, the income phase-out range rises to between $236,000 and $246,000, up from between $230,000 and $240,000.
The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA remains between $0 and $10,000 (it is not subject to an annual cost-of-living adjustment).