The IRS has recently made an announcement regarding the new contribution limits for 401(k) plans in 2025. The standard contribution limit will be increased to $23,500, while the catch-up contribution limit for individuals aged 50 and older will remain at $7,500.

These limits are applicable to various workplace plans such as 401(k)s, 403(b)s, most 457 plans, and the federal Thrift Savings Plan. In an important update, individuals aged 60 to 63 will now be able to make catch-up contributions of up to $11,250 in 2025, allowing for a total contribution of $34,750 for this age group. This change is part of the Secure 2.0 Act, which aims to improve retirement savings options for older Americans.

Additionally, the IRS has also announced higher income thresholds for Roth IRA contributions and other inflation adjustments for 2025, including updates to federal income tax brackets and capital gains tax rates. These changes reflect the ongoing efforts to adapt to economic conditions and support retirement savings.