There is still time to review funding of your retirement accounts in 2025. The higher income phaseouts for eligibility will make many more taxpayers eligible for fully-deductible contributions. So plan now to take full advantage of this tax benefit. Here are annual contribution limits for the more popular programs:
Plan |
2025 |
Change from 2024 |
|
| SIMPLE IRA |
Annual Contribution 50 or over catch-up |
$16,500 Add $3,500 |
+$500 No Change |
| 401(k), 403(b), and 457 |
Annual Contribution 50 or over catch-up 2025 catch-up: ages 60-63 |
$23,500 Add $7,500 Add $11,250 |
+$500 No Change
|
| Traditional IRA |
Annual Contribution 50 or over catch-up |
$7,000 $1,000 |
No Change |
| AGI Deduction Phaseouts: |
Single; Head of Household Joint nonparticipating spouse Joint participating spouse Married Filing Separately |
$79,000 – $89,000 $236,000 – $246,000 $126,000 – $146,000 $0 – $10,000 |
+$2,000 +$6,000 +$3,000 No Change |
| Roth IRA |
Annual Contribution 50 or over catch-up |
$7,000 Add $1,000 |
No Change |
| AGI Deduction Phaseouts: |
Single; Head of Household Married Filing Jointly Married Filing Separately |
$150,000 – $165,000 $346,000 – $246,000 $0 – $10,000 |
+$4,000 +$6,000 No Change |
| Rollover to Roth Eligibility |
Joint, Single, or Head of Household Married Filing Separately |
No AGI Limit Allowed/No AGI Limit |
No AGI Limit Allowed/No AGI Limit |
How to use
- Identify the the type(s) of retirement savings plans that you currently use.
- Note the annual savings limits of the plan to adjust your savings to take full advantage of the annual contributions. Remember, a missed year is a missed opportunity that does not come back.
- If you are 50 years or older, add the catch-up amount to your potential savings total.
- There is an increase in the 401(k), 403(b), and 457 catch-up contributions you may use if you are ages 60 to 63.
- Take note of the income limits within each plan type.
- For traditional IRA’s, if your income is below the noted threshold, your taxable income is reduced by your contributions. The deductibility of your contributions is also limited if your spouse has access to a plan.
- In the case of Roth IRAs, the income limits restrict who can participate in the plan.
Dave Corneil, CPA, CVA, and Partner comments,
“Maximizing your retirement savings requires careful attention to contribution limits, catch-up opportunities, and income thresholds for each plan type. The new increases in catch-up contributions for ages 60 to 63 create an excellent opportunity to boost your retirement funds. Additionally, reviewing beneficiary designations and exploring accounts for spouses or dependents can ensure your overall plan aligns with your long-term goals. At CDS, we’re here to help you navigate these strategies and make the most of your retirement savings.”
Other ideas
If you have not already done so, also consider:
- Setting up new accounts for a spouse or dependent(s)
- Using this time as a chance to review the status of your retirement plan including beneficiaries
- Reviewing contributions to other tax-advantaged plans like Flexible Spending Accounts and Health Savings Accounts.
Visit with one of our experts by calling (888) 388-1040 to review your individual situation.
