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Key Updates for Retirement Planning
IRS 2025 Retirement Plan Contribution Limits
he IRS has revealed the updated 2025 contribution limits for employer-sponsored retirement plans, including 401(k), 403(b), and 457 plans, reflecting adjustments for inflation and cost of living increases. The new limit for combined traditional (pre-tax) and Roth (after-tax) contributions is $23,500. This increase enhances retirement savings capacity and potentially reduces tax liabilities.
Options Based on Tax |
Traditional Contributions |
Roth Contributions |
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| Pre-tax dollars This lowers your taxable income for the year, potentially reducing your tax bill. |
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| After-tax dollars This has no effect on current adjusted gross income. |
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Withdrawals taxed as ordinary income in retirement Taxes will be owed on your contributions and earnings when you withdrawal. |
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Qualified withdrawals are not taxed Withdrawals are tax-free, both contributions and earnings . |
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| Pre-tax employer contributions | |
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Catch-up Contributions for Participants Over Age 50
Participants aged 50 and older have the additional benefit of catch-up contributions available to them. Catch-up contributions allow individuals to contribute beyond the standard contribution limit in order to accelerate retirement savings.
- Individuals over 50 can contribute an additional $7,500 in 2025, bringing the total possible contribution to $31,000 for the year.
- Under the SECURE 2.0 Act rule, individuals who attain the ages of 60, 61, 62, or 63 in 2025 are eligible to contribute an additional $11,250. This is a notable increase compared to the standard $7,500 catch-up contribution and is designed to help individuals from age 60 to 63 to save more aggressively as retirement approaches.
The new 2025 catch-up contribution limits provide a valuable chance for individuals to accelerate retirement savings as they approach retirement. Regularly evaluating your retirement contributions and making necessary adjustments helps ensure you are on the right path to meet your retirement goals.
Accessing your Retirement Account
You can access your retirement account by visiting www.go-retire.com or by downloading the Go-Retire app on your mobile device. If this is your first time logging in, your username will be your Social Security Number without any dashes or spaces, and your password will be your date of birth formatted as MMDDYYYY. For those who have logged in before, use the username and password that you previously created.
Our team at First Citizens Wealth Management is here to help if you have questions about maximizing your retirement plan contributions.
Source: IRS Notice 2024-80 (Nov. 1, 2024); IRS News Release IR-2024-285 (Nov. 1, 2024)