Savings are essential as you prepare for retirement, but chances are your preferred method(s) of saving come with a few rules and are a bit more complicated than simply adding to a pile during your working years before taking back from your funds in retirement.

Many traditional savings vehicles place limits on how much you can contribute in a year. Additional contributions above normal limits are also available for some plans once a set age has been attained. Knowing all your options and relevant regulations is a great way to optimize whichever strategy you choose.

Starting in 2025, the annual contribution limit for employees participating in 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan has increased to $23,500, up from $23,000¹. This increase allows you to save more for your retirement each year. The limit on annual contributions to an IRA remains $7,000.

For those aged 50 and over, the catch-up contribution limit for 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains at $7,500. This means that participants in these plans who are 50 and older can contribute up to $31,000 each year, starting in 2025.

Additionally, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.

These adjustments ensure that more individuals can take advantage of tax-advantaged retirement savings.

Speaking to an experienced professional is a great way to discover options and opportunities available to you. Call us at 678-539-9518, and find out what we can do for your retirement plans.

https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000

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This blog is intended for informational purposes only. It is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual’s situation.