Action Required: SECURE 2.0 allows IRS Increases 401(k) and Catch-up limit up to $34,750 for 2025

 Also see the associated YouTube Video

401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000

The IRS raised the standard 401(k) contribution limit from $23,000 to $23,500 (+$500 or +2.2%). It did not increase the IRA contribution limit, which remains $7,000.

From the IRS Website
The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains $7,500 for 2025. Therefore, participants in most 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan who are 50 and older generally can contribute up to $31,000 each year, starting in 2025.

Under a change made in SECURE 2.0, a higher catch-up contribution limit applies for employees aged 60, 61, 62, and 63 who participate in these plans. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.

That is an additional $3,750 for catch-up contributions in 2025.

What does that mean? A 60-year-old could have an additional $5,700 (growth of 6%) to $6,500 (growth of 8%) at age 67!

Age in 2025

Standard Limit

Catch-Up Limit

Total 2025 Limit

Younger than 50

$23,500

$0

$23,500

50-59

$23,500

$7,500

$31,000

60-63

$23,500

$11,250

$34,750

64+

$23,500

$7,500

$31,000

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