With a new year comes new retirement contribution limits from the IRS. Saving for retirement and taking advantage of various tax benefits are key elements in successful financial planning. To leverage those savings, it’s important to track changes in contribution limits to remain aware of all benefits and plan accordingly.
Elective Deferral Accounts – 401(k), 403(b), 457(b), and Thrift Savings Plan (TSP)
The IRS limits how much an employee and an employer may contribute to a 401(k) each year. Regardless of the number of these accounts a person has, they are limited to the same annual contribution cap for all 401(k) s that they hold. In other words, whether a person has one 401(k) or several 401(k) s, they may only contribute up to $23,500 across all accounts in 2025 if under age 50. Additionally, it makes no difference whether the account has a traditional or Roth component, or both. The annual contribution remains the same across all of these types of accounts.
The IRS announced an increase in annual contribution limits for both employees and employers to a 401(k) for 2025. Below is a chart detailing those changes:
| 401(k) Contribution Limits | 2024 | 2025 |
| Pre-tax & Roth Employee Contributions | $23,000 | $23,500 |
| Employee + Employer Contributions | $69,000 | $70,000 |
| Additional Catch-up Contributions (Ages 50+) | $7,500 | $7,500 |
Similar to 401(k) accounts, the IRS increased the annual contribution limit for 403(b), 457(b), and TSP accounts from $23,000 to $23,5000. The additional catch-up contributions for these accounts remain at $7,500 annually.
Individual Retirement Accounts (IRA’s)
Those who reach the annual contribution limit for their 401(k) often also contribute to an IRA for additional retirement savings and potential growth. The IRS did not increase the contribution limit across all IRA accounts for 2025. The total contribution that can be made across all traditional and Roth IRA’s for 2024 and 2025 is $7,000 if under age 50. If age 50 or older, an additional $1,000 per year may contributed, for a total of up to $8,000 across all IRA’s annually.
Depending upon your annual income and tax filing status, the contribution limit to a Roth IRA may be reduced further. The IRS provides a chart and calculation here to learn more.
Health Savings Accounts (HSA’s)
To further leverage tax savings, those with a high-deductible health insurance plan often offset the high deductible by contributing to an HSA. The contributions can be tax-deductible and withdrawals for qualified medical expenses can be tax-free.
For individual health plans, the IRS increased the annual contribution $4,150 in 2024 to $4,300 for 2025. For family health plans, the annual contribution was increased from $8,300 for 2024 to $8,550 for 2025. If age 55 or older an additional catch-up contribution up to $1,000 is permitted. Any employer contributions count towards these limits.
As retirement contribution limits evolve, it’s crucial to stay informed and ensure your retirement plans align with the latest regulations. If you have questions about how these changes impact your business or personal retirement strategy, or need assistance with compliance and planning, contact our office today. Our experienced team of business lawyers is here to provide personalized advice and support tailored to your unique needs.
