The 401(k) cap will shortly be altered by IRS officials. To be precise, it will increase to $23,500 in 2025. However, if you have an IRA, the limit remains at $7,000.
Keep in mind that the IRS established a $23,000 cap on the maximum amount you might deposit into a 401(k) savings account in 2024. The gain won’t be significant because it will only increase by $500.
IRS highlight of changes for 2025
The maximum amount that can be contributed to a 401(k) will be altered by the IRS this year. Taxpayers should also be aware of a few other significant changes.
For instance, similar to the 401(k), employees will be able to contribute up to $23,500 annually to the government’s 457 plans, the federal government’s Thrift Savings Plan, and the 403(b).
People 50 and older might want to know how much they can contribute to their 401(k) as of 2025. Unfortunately, it doesn’t change because in 2025, it will still be $7,500 for
- 401(k)
- 403(b)
- gov. 457 plans
- Fed Thrift Savings plans
As a result, those over 50 are eligible to make contributions of up to $31,000 year.
IRS unveils higher catch-up contribution limit for employees 60-63
Individuals with 401(k), 403(b), gov. 457, or Fed Thrift Savings plans who are 60, 61, 62, and 63 years old should be content. Their maximum contribution to catch up will be $11,250.
In 2024, it’s only $7,500, just so you know. Those who are eligible and have sufficient funds between the ages of 60 and 63 will be able to contribute $3,750 more than they could in 2024. When you retire, you can be certain that it will be useful.
In 2025, those of you who have an IRA account and are 50 years of age or older will still be allowed to contribute up to $1,000 annually. The next IRA-related development is equally intriguing.
The income limits that determine whether you may make tax-deductible contributions to regular IRAs, Roth IRAs, and the Saver’s Credit have all increased for the upcoming year, according to the IRS.
See also: Eligible recipients of disability benefits will get this new Social Security check, which is a certified $4,018 SSDI payment for January.
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Eliot Pierce is a dedicated writer for ChiefsFocus.com, covering local crime and finance news. With a keen eye for detail and a passion for storytelling, Eliot aims to provide his readers with clear and insightful analysis, helping them navigate the complexities of their financial lives while staying informed about important local events. His commitment to delivering accurate and engaging content makes him a valuable resource for the community.