<p><p>&lt;p&gt;The IRS announced updated retirement plan limits for 2025 in &lt;strong&gt;IRS Notice 2024-80&lt;/strong&gt; (IR-2024-285). These changes took effect January 1, 2025.&lt;/p&gt;&lt;h2&gt;2025 401(k) Limits&lt;/h2&gt;&lt;ul&gt;&lt;li&gt;&lt;strong&gt;Employee contribution limit:&lt;/strong&gt; $23,500 (up from $23,000 in 2024)&lt;/li&gt;&lt;li&gt;&lt;strong&gt;Catch-up contribution (age 50β59, 64+):&lt;/strong&gt; Additional $7,500 = total $31,000&lt;/li&gt;&lt;li&gt;&lt;strong&gt;Super catch-up (ages 60β63):&lt;/strong&gt; Additional $11,250 = total $34,750 (NEW for 2025 under SECURE 2.0)&lt;/li&gt;&lt;li&gt;&lt;strong&gt;Total limit including employer contributions:&lt;/strong&gt; $70,000&lt;/li&gt;&lt;/ul&gt;&lt;h2&gt;IRA Limits (Unchanged for 2025)&lt;/h2&gt;&lt;ul&gt;&lt;li&gt;$7,000 per year ($8,000 if age 50+)&lt;/li&gt;&lt;/ul&gt;&lt;h2&gt;Why This Matters&lt;/h2&gt;&lt;p&gt;Every dollar contributed to a traditional 401(k) reduces your taxable income today. At a 22% tax bracket, contributing the full $23,500 saves you &lt;strong&gt;$5,170 in federal taxes&lt;/strong&gt; this year alone β not counting state taxes or the long-term investment growth.&lt;/p&gt;&lt;h2&gt;Action Step&lt;/h2&gt;&lt;p&gt;Log into your employer's 401(k) portal and update your contribution percentage. Many employers allow changes at any time during the year.&lt;/p&gt;&lt;p&gt;&lt;em&gt;Source: IRS Notice 2024-80; IR-2024-285&lt;/em&gt;&lt;/p&gt;</p></p>
π
Table of Contents
Have Questions About Your Taxes?
As an Enrolled Agent (EA) licensed by the IRS, I can help you apply these concepts to your specific situation. Book a free initial consultation β no obligation.
Comments (0)
Be the first to leave a comment!
Leave a Comment