2025 contribution limits and deadlines: What’s changed and what you need to know

Allworth financial advisor Lynda Tu outlines the updated 2025 contribution limits for retirement and savings accounts, helping you take advantage of new opportunities to save more and reduce taxes.

 

A new year brings fresh opportunities to save—and this year is no exception. If you’re thinking about retirement, building your wealth, or just making the most of tax-advantaged accounts, knowing the contribution limits and deadlines for 2025 is essential. Staying informed about these changes now means you can plan ahead, take action, and feel confident that your financial goals are on track.

Here’s a breakdown of what’s new for 2025 and what it means for you.

401(k), 403(b), and 457 Plans: Bigger Opportunities to Save

For those who contribute to a workplace retirement plan like a 401(k), 403(b), or 457 plan, the contribution limits have increased for 2025, giving you an opportunity to save even more.

• The new limit for employee contributions is $23,500 (up from $23,000 in 2024).
• If you’re 50 or older, you can take advantage of an additional $7,500 catch-up contribution, bringing your total to $31,000.
• If you’re between the ages of 60 and 63, there’s even more good news: the catch-up contribution jumps to $11,250, bringing your total potential contribution to $34,750. This higher limit is part of the SECURE 2.0 Act and is designed to help those nearing retirement boost their savings significantly.

If you haven’t maxed out your contributions in the past, now’s a great time to revisit your plan and adjust your savings rate. Even small increases can add up over time, thanks to compounding.

Deadline: Contributions to your workplace plan must be made by December 31, 2025. Reach out to your employer or HR team early in the year if you’d like to make changes.

Traditional and Roth IRAs: The 2025 Limits

For individual retirement accounts (IRAs), contribution limits have remained the same:

• You can contribute up to $7,000 for the year.
• If you’re 50 or older, you can add a catch-up contribution of $1,000, bringing your total to $8,000.

But here’s the important part: whether you can contribute to a Roth IRA or deduct contributions to a traditional IRA depends on your income. If you’re not sure whether you qualify, it’s okay to wait. You have until April 15, 2026 (the tax filing deadline) to finalize your 2025 IRA contributions, which gives you time to review your tax return and confirm your eligibility.

Health Savings Accounts (HSAs): Triple Tax Benefits for Your Future

If you’re enrolled in a high-deductible health plan (HDHP), Health Savings Accounts (HSAs) are one of the most tax-advantaged tools you can use. HSAs help you save for medical expenses now and in retirement, with the added bonus of a triple tax benefit: contributions are tax-deductible, growth is tax-free, and withdrawals for qualified expenses are also tax-free.

For 2025, the new HSA limits are:

• $4,300 for individuals (up from $4,150 in 2024).
• $8,550 for families (up from $8,300 in 2024).
• An additional $1,000 catch-up contribution if you’re 55 or older.

Deadline: Like IRAs, HSA contributions for 2025 can be made until April 15, 2026. If you’re looking for ways to lower your taxable income and save for future healthcare costs, this is a great option to explore.

Don’t Forget About Your RMDs

If you’re 73 or older, you’ll need to take Required Minimum Distributions (RMDs) from your traditional IRA, 401(k), or other tax-deferred accounts. Missing your RMD can result in a significant penalty, so it’s important to plan ahead.

Deadline: RMDs must be taken by December 31, 2025, unless it’s your first year taking an RMD (in which case you have until April 1 of the following year).

Maximize Your Opportunities Now

Whether you’re nearing retirement or simply looking to make the most of 2025, these updated contribution limits give you a chance to boost your savings and reduce your taxable income. The key is to start planning early:

1. Review Your Budget: Look for opportunities to increase your savings rate, even if it’s just a small amount.
2. Check Your Eligibility: Make sure you qualify for Roth contributions or IRA deductions based on your income.
3. Adjust Workplace Contributions: Reach out to your HR team to update your 401(k) or similar plan.
4. Think About Taxes: Consider how contributions to HSAs, IRAs, and 401(k)s can help lower your tax bill for 2025.
5. Ask for Help: A financial advisor can help you create a strategy to meet your savings goals and ensure you’re taking full advantage of these opportunities.

Final Thoughts

Contribution limits are going up, and that’s good news for savers. Whether you’re adding to your 401(k), IRA, or HSA, every dollar saved moves you closer to the retirement and financial security you’re working toward.

If you’d like to review your contributions or talk through a strategy for the year ahead, I’m here to help. Together, we can work to make 2025 a strong year for your financial future.

Lynda Tu

Financial Advisor

After my family left Vietnam, to start from scratch in America, my parents were very conscientious about what they spent money on. However, they always prioritized helping my brother and me, while putting their own needs on the back burner. In their unspoken gestures of sacrifice and giving to others, I discovered my own sense of what it means to serve others. A commitment that I continue to hold close to my heart, as I work to help my clients regain their time, feel well cared for, and ultimately experience the peace of mind they deserve.

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