Maximizing Your Retirement Savings: 401k and Retirement Plan Limits for Tax Year 2025

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IRS 2025 Retirement Plan Contribution Limits | Clark Schaefer Hackett
As the new tax year approaches, it's essential to stay informed about the latest updates on 401k and retirement plan limits. The Internal Revenue Service (IRS) announces these limits annually, and for tax year 2025, there are some notable changes that can help you maximize your retirement savings. In this article, we'll delve into the details of the 401k and retirement plan limits for tax year 2025, providing you with the information you need to plan for a secure financial future.
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401k Contribution Limits for Tax Year 2025

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The IRS has increased the 401k contribution limit for tax year 2025. The new limit is $22,500, up from $22,000 in 2025. This means that you can contribute up to $22,500 to your 401k plan in 2025, taking advantage of the tax benefits and compound interest that come with it. Additionally, if you're 50 or older, you can make catch-up contributions of up to $7,500, bringing your total contribution limit to $30,000.
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Other Retirement Plan Limits for Tax Year 2025

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In addition to 401k plans, there are other retirement plans that have updated limits for tax year 2025. These include:
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403(b) plans: The contribution limit for 403(b) plans is also $22,500, with a catch-up contribution limit of $7,500 for those 50 or older. Thrift Savings Plan: The contribution limit for the Thrift Savings Plan is $22,500, with a catch-up contribution limit of $7,500 for those 50 or older. IRA contributions: The contribution limit for traditional and Roth IRAs is $6,500, with a catch-up contribution limit of $1,000 for those 50 or older.
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Highly Compensated Employee (HCE) Limits for Tax Year 2025

If you're a highly compensated employee (HCE), there are specific limits that apply to your retirement plan contributions. For tax year 2025, the HCE limit is $135,000, up from $130,000 in 2025. This means that if you earn above this threshold, you may be subject to certain restrictions on your retirement plan contributions.
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Key Takeaways for Tax Year 2025

To summarize, the key takeaways for 401k and retirement plan limits in tax year 2025 are: 401k contribution limit: $22,500 Catch-up contribution limit: $7,500 for those 50 or older Other retirement plan limits: $22,500 for 403(b) plans and the Thrift Savings Plan, and $6,500 for IRA contributions HCE limit: $135,000 By understanding these limits and planning accordingly, you can maximize your retirement savings and set yourself up for long-term financial success. Remember to consult with a financial advisor or tax professional to ensure you're taking advantage of the retirement savings opportunities available to you.

For more information on 401k and retirement plan limits, visit the IRS website or consult with a financial advisor. Stay informed, and start planning for a secure financial future today!

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