As you plan for retirement, understanding contribution limits and savings strategies is key. Here’s what you need to know for 2025:
Employer-Sponsored Retirement Plans
401(k), 403(b), and 457(b) Plans
- Contribution limit: $23,500
- Catch-up contribution (ages 50-59, 64+): $7,500
- Special catch-up (ages 60-63): $11,250
SEP IRA
- Contribution limit: Lesser of $70,000 or 25% of salary
Individual Retirement Accounts (IRAs)
Traditional and Roth IRAs
- Contribution limit: $7,000
- Catch-up contribution (age 50+): $1,000
Health Savings Account (HSA)
Consider opening an HSA to save for healthcare expenses in retirement.
Savings Strategies
- Maximize employer-sponsored plan contributions
- Contribute to both traditional and Roth accounts for tax diversity
- Take advantage of catch-up contributions if eligible
- Consider delaying Social Security benefits to maximize payments
- Develop a withdrawal strategy, such as the 4% rule
Income Considerations
For Roth IRA eligibility in 2025:
- Single filers: Modified Adjusted Gross Income (MAGI) under $150,000
- Joint filers: MAGI under $236,000
Remember to review and adjust your contributions annually to make the most of your retirement savings opportunities.
