2025 Retirement Account Limits

While we always advise clients to consult with their tax advisor when considering the tax implications of contributions to retirement accounts, we have compiled the information below as an informational guide to help you navigate these decisions.

Workplace Retirement Plans

For 2025, the contribution limit for 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan are as follows:

Under 50 years old: $23,500

50+ years old: $31,000 (due to $7,500 catch-up contribution limit)  *Note that you are eligible for the catchup on January 1st of the year you turn 50.  You do not need to wait until the day you turn 50 to start contributing your catchup funds.

*New for 2025 - 60-63 years old: $34,750 (Due to SECURE 2.0 allowing for a higher catch-up contribution for employees aged 60-63.)

Traditional IRAs

IRA Plan Contribution Limits for 2025

Under 50 years old: $7,000

50+ years old: $8,000

Who can contribute to an IRA? Anyone who has earned income of at least the contribution amount can fund an IRA, up to a contribution limit of $7,000 for 2025. For example, if an individual has earned income of $3,000, then the maximum contribution for the year is $3,000.  

Is my contribution tax deductible? Whether or not an IRA contribution is tax deductible, in part or in full, depends on two factors:

1) What is the contributor’s Modified Adjusted Gross Income (MAGI)?

2) Is the contributor or his or her spouse covered by an employer plan?

For 2025, the following rules apply : - 

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ROTH IRAs

IRA Plan Contribution Limits for 2025 (Total combined Roth and Traditional IRA limit)

Under 50 years old: $7,000

50+ years old: $8,000

• Contributions to a Roth IRA are not tax deductible.
• If you satisfy certain requirements, qualified distributions after you reach age 59½ are tax-free.
• You can make contributions to your Roth IRA after you reach age 70½ as long as you are still working.
• You can leave amounts in your Roth IRA as long as you live.

Who can contribute to a Roth IRA? Whether or not an individual can contribute to a Roth IRA depends on the individual’s income.  The IRS allows for the maximum contribution below certain income levels and a phaseout contribution above that level.

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Required Minimum Distributions (RMDs)

Individuals born in 1951 or later must begin taking minimum distributions from tax deferred retirement accounts annually at age 73. The first RMD can be delayed until April 1^st of the following year but whether or not the first RMD is delayed, the second RMD must also be completed in the year the individual turns 74.

Rollovers of Unused Funds from 529 Plans to ROTH IRAs

Beginning with distributions made after December 31, 2023, a beneficiary of a 529 qualified tuition program is permitted to roll over a distribution from the 529 account to a Roth IRA for the beneficiary if certain requirements are met.

• The rollover must be paid through a trustee-to-trustee transfer.
• The rollover amount cannot be more than the Roth IRA annual contributions limit.
• The rollover must be from a 529 account that has been open for more than 15 years.
• The distribution cannot exceed the aggregate amount contributed to the program (and earnings attributed to the contributed amount) before the 5-year period ending on the date of the distribution.