When it comes to saving for retirement, there are multiple strategies, but the tow most common ones are to start saving as soon as possible or to save as much as possible once you are closer to retirement. Since many people have debt and responsibilities, along with lower salaries, at the start of their career, the Internal Revenue Service (IRS) has a few provisions that make it easier for older adults to save faster before the time to retire comes.

The effort may seem futile, data from Vanguard’s How America Saves report indicates that only 14% of employees currently maximize their contributions to workplace retirement plans. This is disheartening considering that most Americans do not have enough savings for retirement, and employer matched plans are some of the easier ways to top up their account.

There is an obvious disconnect between the reality of saving for retirement and the opportunities both companies and the IRS present workers to do so. But the new provisions for older adults may help bridge this gap, as they tend to have higher salaries and less debt, and so contributing to retirement accounts may be more feasible for those already planning to leave the workforce.

The new IRS retirement savings limit

First and foremost, 401(k)s, 403(b)s, governmental 457 plans, and the federal government’s Thrift Savings Plan will see an increased annual employee deferral limit for workplace plans up from $23,000 to $23,500, But the real change comes for those that are 60 to 63.

The catch-up contribution limit for workers aged 50 and older remains at $7,500, allowing a total contribution of up to $31,000 in 2025, which is something they should take advantage of, but there is an extra tier of contributions referred as “super catch-up contribution” that is getting a boost.

For employees aged 60 to 63 the new super catch-up contribution has a limit set at $11,250. Employers will need to amend their plans to allow for this enhanced contribution, meant to help hose nearing retirement age save as much as possible.

Richard Pon, a certified public accountant based in San Francisco, California, emphasizes the importance of employer participation in this new provision. He notes, “Once you hit age 64, you are no longer eligible for a super catch-up contribution and are limited to the regular catch-up contribution amount.”

This means that those in the 60 to 63 age bracket need to act fast and start making the contributions in order to plan better for their retirement savings strategy.

Other IRS changes in 2025

Along with the changes in workplace retirement plans, income ranges for contributions to traditional and Roth IRAs have also been adjusted to reflect cost-of-living changes. This will also ensure that more taxpayers can benefit from tax-advantaged retirement savings.

• For single taxpayers covered by a workplace retirement plan, the phase-out range for IRA contributions has increased to between $79,000 and $89,000
• Married couples filing jointly will also see changes, with the phase-out range for IRA contributions rising to $126,000 to $146,000
• For singles and heads of household the income phase-out range for Roth IRA contributions is now set at $150,000 to $165,000.
• For married couples filing jointly the income phase-out range for Roth IRA contributions is $236,000 to $246,000.

The last key change taxpayers should know about is the change in the income limit for the Saver’s Credit, also known as the Retirement Savings Contributions Credit, which has been adjusted to $79,000 for married couples filing jointly in order to promote and support low- and moderate-income workers in their efforts to save for retirement.

Being aware of these changes can help contributors make the most of their money and save for retirement in a more financially savvy manner.

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