The IRS has announced an increase in the 401(k) employee deferral limit for 2025 to $23,500, up from $23,000 in 2024. Catch-up contributions for those aged 50 and older will remain at $7,500, while individuals aged 60 to 63 can contribute an additional $11,250. In 2023, only 14% of employees maxed out their 401(k) contributions, with an average deferral rate of 7.4%.