401k contribution limits 2025 irs
What are the 401(k) contribution limits for 2025 according to the IRS?
401(k) contribution limits are set by the IRS and are usually adjusted annually to account for factors such as inflation. As of my last update, the IRS hasn’t released the specific 401(k) contribution limits for 2025. However, I can give you some general information about how these limits have historically changed and what factors you might consider.
Understanding 401(k) Limits
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Annual Contribution Limit:
- For recent years, the contribution limit for individuals has been gradually increasing. For instance, in 2023, the maximum amount an individual could contribute was $22,500.
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Catch-Up Contributions:
- For those aged 50 and over, there’s usually an additional “catch-up” contribution limit. In 2023, this amount was $7,500, allowing older contributors to add more to their retirement savings.
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Employer Contributions:
- Remember that the total contribution limit includes both employee and employer contributions. In recent years, these combined limits have also increased incrementally.
What to Expect for 2025
While the specific limit for 2025 isn’t published yet, if the trend continues you might expect:
- An increase in the individual contribution limit based on inflation adjustments.
- A similar increase in catch-up contribution limits for those aged 50 and over.
- Total contribution limits (including employer contributions) to also see an increase.
Staying Informed
To stay updated on the specific limits for 2025, consider:
- Checking the IRS official website closer to the end of 2024 or at the start of 2025 for announcements.
- Consulting with a financial advisor who stays abreast of these updates and can assist in planning your contributions effectively.
Summary: While we don’t have the exact figures for the 401(k) contribution limits for 2025 yet, you can anticipate increases based on historical trends and inflation. For precise numbers, keep an eye on IRS announcements toward the end of 2024.