With the new year comes increased retirement plan contribution limits, offering more opportunities to save for the future. Here’s what you need to know for 2025.
401(k)s and 403(b)s
In 2025, you can defer up to $23,500 from your salary, with a total maximum contribution from all sources reaching $70,000, including employer matching and profit-sharing contributions. If you’re 50 or older, you can make an additional catch-up contribution of $7,500. For those aged 60-63, a special catch-up limit of $11,250 applies, allowing you to supercharge your retirement savings during these years.
Traditional and Roth IRAs
Contribution limits for Traditional and Roth IRAs remain at $7,000, with an extra $1,000 catch-up contribution for those 50 and over.
Roth IRA Income Phase-Outs
Your ability to contribute to a Roth IRA depends on your income. Married couples can make the full contribution if modified adjusted gross income (AGI) falls below $236,000, phasing out completely at $246,000. For single savers, the income range is $150,000 to $165,000.
For high-income earners, consider backdoor Roth IRA contributions if you exceed these limits.
Solo 401(k) and SEP IRAs
Solo 401(k) and SEP IRA contributions have increased, allowing you to save up to $70,000. Want to supercharge your Roth savings? Consider a Mega Backdoor Roth Solo 401(k).
SIMPLE IRAs
The 2025 limit for SIMPLE IRAs is $16,500, with an additional catch-up contribution of $5,000 for those over 50 and an additional $250 for those aged 60-63, providing a valuable tool for small business owners and their employees.
Health Savings Accounts (HSAs)
HSA contributions also saw an increase for 2025 to $4,300 for individuals and $8,550 for families, with an additional $1,000 catch-up for those 55 and older. For those with qualifying health plans, an HSA is an excellent way to save for future medical expenses tax-free. Find out how to maximize your HSA!
If you have any questions about these updates or how to maximize your retirement contributions, reach out—we’re here to help!
Ryan Colis
CFA, CFP®
Partner, Financial Advisor
About the Author
Ryan is a problem solver. He has a distinct ability to create a simple solution for very complex puzzles. So, naturally, he’s an integral part of our team. His favorite part of his role at Alterra is the analysis – whether analyzing a financial plan or reviewing an investment portfolio. However, the profession allows him to share that passion with clients by helping them navigate financial complexities as they collaborate on achieving their personal and financial goals.
After completing his undergraduate degree in Business Management, Ryan and Grant met by chance, developed a rapport and have been working together ever since. Ryan has continued his formal training in finance by earning his CFP and CFA designations.
The “Alterra” name was coined by joining the Latin roots “alter”, the origin of the word “altruism” with “terra” meaning earth or land. This name reflects the company philosophy of “clients before profits” and providing firmly grounded advice.