The IRS officially announced the new 401(k) contribution limits for 2025 (full news release), which also included a new “super catch-up” allowance for people who are ages 60-63 at year-end 2025. Strangely, it goes back down once you are age 64. I hadn’t heard of this before now. As usual, by “401(k)” I mean that it applies to 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan.
The 2025 base 401(k) contribution limit is increased to $23,500, up from $23,000. This WSJ article (paywall) has a handy chart for reference.
The 2025 base IRA contribution limit remains at $7,000 (subject to income limits). Taken together, “maxing out” your IRA and 401(k) now takes more than $30,000 a year even ignoring any catch-ups. That’s a lot, but whatever you can cram in there may get roughly a 30% boost towards your final retirement balance.
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It’s also important to note that this change is optional for employers. So, each plan sponsor will decide whether to implement this feature in their retirement plans.
It’s my understanding many employers are hesitant because their payroll systems still haven’t figured out how to run this algorithm.