For 2025, the IRS has adjusted the contribution limits for qualified retirement plans. Here are the key details:
- 401(k) Plans: The contribution limit for 401(k) plans has been increased to $21,000. This limit applies to both traditional and Roth 401(k) contributions.
- IRA Contributions: The annual contribution limit for IRAs (Traditional and Roth) remains at $6,000 for individuals under 50 years old. However, individuals aged 50 and older can make an additional catch-up contribution of $1,000, making their total limit $7,000.
- SIMPLE IRA Plans: The contribution limit for SIMPLE IRA plans has been raised to $14,000.
- Defined Contribution Plans: The overall limit for defined contribution plans (including employer contributions) has been increased to $61,000.
These limits are adjusted periodically to account for inflation and changes in the cost of living. It's important for individuals and employers to stay informed about these changes to maximize retirement savings opportunities effectively.
For more information, or for help determining which plan might be right for you, contact us at david@ifgfl.com or by calling 352-609-5262.