IRS Announces Increased Retirement Savings Limits for 2025

Washington, D.C. – The Internal Revenue Service (IRS) has announced new cost-of-living adjustments for the year 2025, affecting contribution limits for retirement plans.

Starting in 2025, employees participating in 401(k), 403(b), and most 457 plans, along with the federal government’s Thrift Savings Plan, can contribute up to $24,500, an increase from $23,500 in 2024. The catch-up contribution limit for employees aged 50 and over will now be $8,000, up from $7,500.

This means participants aged 50 and older can contribute a total of $32,500 annually starting in 2026. Additionally, a higher catch-up contribution limit of $11,250 will apply to employees aged 60, 61, 62, and 63.

The limit on annual contributions to an Individual Retirement Account (IRA) has also increased to $7,500, from $7,000. The catch-up limit for IRA contributions for those 50 and older is now $1,100, up from $1,000.

Income ranges for deductible contributions to traditional IRAs and contributions to Roth IRAs will also see increases for 2026. For example, the phase-out range for Roth IRA contributions for singles and heads of household will be between $153,000 and $168,000, an increase from $150,000 to $165,000 in 2025.

Taxpayers should be aware that if either they or their spouse is covered by a workplace retirement plan, deductions may be reduced based on filing status and income.

The IRS provides additional details on these adjustments in a downloadable PDF.