In a recent announcement, the Internal Revenue Service (IRS) revealed important changes to retirement savings rules for 2025. These changes include higher contribution limits for 401(k) accounts and a new special “super catch-up” option for individuals aged 60 to 63. This article will explain these updates and how they can help you save more for retirement.
Increased 401(k) Contribution Limits for 2025
Starting in 2025, the IRS will increase the maximum amount workers can contribute to their 401(k) plans. The annual employee deferral limit will rise to $23,500, which is an increase from $23,000 in 2024. This change means that workers can set aside more of their pre-tax income for retirement.
These higher contribution limits apply to various retirement plans, including 401(k), 403(b), 457 plans, and the federal Thrift Savings Plan. With more money going into your 401(k), you’ll have a better chance of growing your savings for retirement.
Catch-Up Contributions for Workers Aged 50 and Above
For people aged 50 or older, there is an extra opportunity to save even more. This is called the “catch-up” contribution. In 2025, the catch-up contribution limit for people aged 50 and above will stay at $7,500, the same as it was in 2024.
This means that older workers can contribute a total of $31,000 to their 401(k) plans in 2025: $23,500 as the regular contribution plus $7,500 as the catch-up contribution.
The New “Super Catch-Up” Option for Ages 60 to 63
One of the biggest changes for 2025 is the introduction of a new “super catch-up” contribution for people aged 60 to 63. This special provision allows workers in this age range to contribute an additional $11,250 to their 401(k) accounts. As a result, they can put a total of $34,750 into their retirement accounts in 2025.
This is a significant opportunity for people who are close to retirement to boost their savings. However, it’s important to remember that the super catch-up option is only available for people aged 60 to 63. Once you turn 64, you will return to the standard catch-up limit of $7,500.
Employer Plan Changes Required
To take advantage of the super catch-up provision, employers must update their retirement plans. This means that workers will need to check with their employers or HR departments to confirm whether this option will be available in their company’s 401(k) plan. It is important to stay informed so that you can make the most of the new contribution limits.
IRA Contribution Limits for 2025
Along with changes to 401(k) contribution limits, there are also updates to the Individual Retirement Account (IRA) limits for 2025. The contribution limit for IRAs will remain the same as in 2024, at $7,000. For people aged 50 and older, there will still be a catch-up contribution of $1,000, meaning that the total IRA contribution limit for those 50 and older will be $8,000.
It’s worth noting that there will be no super catch-up option for IRAs, so the higher limits only apply to 401(k) plans.
Summary of 2025 Contribution Limits
Here’s a quick look at the 2025 contribution limits for different retirement plans:
| Plan Type | Standard Contribution Limit | Catch-Up Contribution (Age 50+) | Super Catch-Up (Ages 60-63) | Total Potential Contribution |
|---|---|---|---|---|
| 401(k), 403(b), 457, Thrift Savings Plan | $23,500 | $7,500 | $11,250 | $34,750 |
| IRA | $7,000 | $1,000 | N/A | $8,000 |
How These Changes Benefit You
The new changes to 401(k) contribution limits provide a great opportunity to save more for your future. For people nearing retirement, the super catch-up provision gives a significant boost to savings during the critical years leading up to retirement. By using these new contribution limits, workers can make sure they have enough money saved to enjoy their retirement years comfortably.
It’s a good idea to talk to your employer or HR department to find out if your company is offering the super catch-up option, so you don’t miss out on this opportunity. Planning ahead and taking advantage of these increased limits can help set you up for a more secure financial future.
1. When will I receive my SNAP benefits in November 2024?
Florida SNAP payments are made based on the last two digits of your case number (excluding the final digit). The payments will be distributed between November 4 and November 7, 2024. For example, if your case number ends in 11-13, you’ll receive your payment on November 4.
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You can use your SNAP benefits to buy a variety of food items such as fruits, vegetables, dairy, bread, meat, and cereals. However, you cannot use SNAP benefits to buy non-food items like cleaning supplies, alcohol, tobacco, or vitamins.
3. How do I check my EBT balance?
To check your EBT balance, you can visit the Florida EBT website, use the mobile app, or call the customer service number provided on your EBT card. It’s important to monitor your balance to ensure you know when your benefits are available.