How Much Can You Put in Your 401(k) in 2025: As we step into the 2025 tax year, the IRS has officially updated the 401(k) contribution limits, giving Americans a fresh opportunity to supercharge their retirement savings. If you’re wondering how much you can stash away this year — and whether you qualify for extra catch-up contributions — the new figures may pleasantly surprise, you.
This article breaks down the 2025 401(k), IRA, and SIMPLE retirement plan contribution limits, with practical advice to help both employees and employers make the most of the new caps. Whether you’re just starting your career or planning to retire soon, understanding these limits is key to securing your financial future.
How Much Can You Put in Your 401(k) in 2025
| Limit Type | 2025 Amount | 2024 Amount | Notes |
|---|---|---|---|
| Employee 401(k) Contribution Limit | $23,500 | $23,000 | Applies to 401(k), 403(b), 457 plans, and Thrift Savings Plan |
| Age 50+ Catch-Up Contribution | $7,500 | $7,500 | Total limit for age 50+ is $31,000 |
| Age 60–63 Enhanced Catch-Up (SECURE 2.0) | $11,250 | New in 2025 | Total limit for 60–63 is $34,750 |
| Combined Employee + Employer Limit | $70,000 | $69,000 | Total max contributions from all sources |
| IRA Contribution Limit | $7,000 | $7,000 | Applies to both Traditional and Roth IRAs |
| IRA Catch-Up Contribution (50+) | $1,000 | $1,000 | Total IRA limit for 50+ is $8,000 |
| SIMPLE IRA Contribution Limit | $16,500 | $15,500 | For employees in SIMPLE retirement plans |
| SIMPLE IRA Catch-Up (Age 60–63) | $5,250 | New in 2025 | Allows additional savings for those nearing retirement |
| Official IRS Source | irs.gov |
The new 401(k) and retirement plan contribution limits for 2025 offer exciting opportunities for savers at every stage of life. Whether you’re 25 or 63, increasing your contributions — even a little — can lead to significant long-term gains. Make the most of the IRS’s updated rules by reviewing your retirement plan strategy now.
Understanding the New 401(k) Contribution Limits
Employee Contribution Limit: $23,500
For 2025, the standard limit for employee contributions to a 401(k) plan is $23,500, an increase from $23,000 in 2024. This applies to 403(b), most 457 plans, and the Federal Thrift Savings Plan.
This annual limit is how much you can contribute from your own salary — before tax — and it doesn’t include any employer matching or profit-sharing contributions.
Catch-Up Contributions: Age 50 and Above
If you’re 50 or older, you’re allowed to make an extra $7,500 in catch-up contributions. That means your total 401(k) contribution limit rises to $31,000 in 2025.
This feature is designed to help older workers save more aggressively as they approach retirement.
SECURE 2.0 Bonus Catch-Up: Ages 60–63
Thanks to the SECURE 2.0 Act, there’s an enhanced catch-up provision for people aged 60 to 63. In 2025, this allows up to $11,250 in extra contributions — raising your total limit to a whopping $34,750.
This is an excellent opportunity for late-career professionals to make a final savings push.
Employer Matching and the $70,000 Cap
Your total 401(k) contribution (including both employee and employer contributions) now maxes out at $70,000. This is a $1,000 increase from the previous year’s cap of $69,000.
Employers may match a portion of your contributions, and if you’re self-employed, you can contribute in both capacities — but the total across all accounts must stay within this limit.
IRA and SIMPLE IRA Limits for 2025
Traditional and Roth IRAs
The contribution limit for both Traditional IRAs and Roth IRAs remains unchanged at $7,000. However, if you’re 50 or older, you can contribute an additional $1,000, making your total $8,000.
Roth IRA income limits may restrict eligibility based on your modified adjusted gross income (MAGI), so it’s wise to check your status before contributing.
SIMPLE IRA Plans
If you’re participating in a SIMPLE IRA, often used by small businesses, the contribution limit is now $16,500, up from $15,500 in 2024.
For those aged 60–63, the catch-up contribution increases to $5,250. This added flexibility can significantly help small business employees nearing retirement.
Practical Advice for Maximizing Your Retirement Contributions
Here’s how to take full advantage of the 2025 changes:
1. Update Your Payroll Elections
Log into your employer’s benefits portal or contact HR to adjust your automatic paycheck deductions to reflect the new limit.
2. Use Catch-Up Contributions Early
If you qualify, don’t wait until the end of the year — start contributing those extra funds as early as possible to maximize growth potential.
3. Consider a Roth Conversion
If you expect your future tax bracket to be higher, consider contributing to a Roth 401(k) or converting part of your Traditional IRA. Consult with a tax advisor.
4. Check Employer Match Policies
Ensure you’re contributing enough to get the full employer match, which is essentially free money. Not contributing at least that amount means leaving cash on the table.
5. Take Advantage of the SECURE 2.0 Act
If you’re 60 to 63 years old, you now have an exclusive window to save more with enhanced catch-up limits. Plan your retirement contributions accordingly.
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FAQs on How Much Can You Put in Your 401(k) in 2025
Q1. Who sets the 401(k) contribution limits?
A: The Internal Revenue Service (IRS) sets these limits annually, adjusting for inflation and policy changes.
Q2. Can I contribute to both a 401(k) and an IRA in 2025?
A: Yes, as long as you meet income and plan eligibility rules, you can contribute to both — up to their respective limits.
Q3. What happens if I exceed the contribution limit?
A: Excess contributions are subject to a 6% tax penalty unless withdrawn by the tax filing deadline.
Q4. Do employer contributions count toward my $23,500 limit?
A: No. Employer contributions do not count toward the $23,500 employee limit but do count toward the $70,000 overall limit.
Q5. What’s the benefit of starting early in the year?
A: Starting early allows for more time in the market, giving your investments a longer time to grow through compounding.
