Retirement Plan Limits for 2025
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Many IRA and retirement plan limits are indexed for inflation each year. Several of these key numbers have increased once again for 2025.
How much can you save in an IRA?
The maximum amount you can contribute to a traditional IRA or a Roth IRA in 2025 will be $7,000 (or 100% of your earned income, if less). The maximum catch-up contribution for those age 50 or older remains $1,000. You can contribute to both a traditional IRA and a Roth IRA in 2025, but your total contributions cannot exceed these annual limits.
Can you deduct your traditional IRA contributions?
If you (or if you're married, both you and your spouse) are not covered by a work-based retirement plan, your contributions to a traditional IRA are generally fully tax deductible.
If you're married, filing jointly, and you're not covered by an employer plan, but your spouse is, you may generally claim a full deduction if your modified adjusted gross income (MAGI) is $236,000 or less (up from $230,000 or less in 2024). Your deduction is limited if your MAGI is between $236,000 and $246,000 (up from $230,000 and $240,000 in 2024) and eliminated if your MAGI is $246,000 or more (up from $240,000 in 2024).
For those who are covered by an employer plan, deductibility depends on income and filing status. If your filing status is single or head of household, you can fully deduct your IRA contribution in 2025 if your MAGI is $79,000 or less (up from $77,000 in 2024). If you're married and filing a joint return, you can fully deduct your contribution if your MAGI is $126,000 or less (up from $123,000 in 2024). For taxpayers earning more than these thresholds, the following phaseout limits apply.
Income limits for making deductible IRA contributions
Can you contribute to a Roth IRA?
The income limits for determining whether you can contribute to a Roth IRA will also increase in 2025. If your filing status is single or head of household, you can contribute the full $7,000 ($8,000 if you are age 50 or older) to a Roth IRA if your MAGI is $150,000 or less (up from $146,000 in 2024). And if you're married and filing a joint return, you can make a full contribution if your MAGI is $236,000 or less (up from 230,000 in 2024). For taxpayers earning more than these thresholds, the following phaseout limits apply.
Income limits for making Roth IRA contributions
How much can you save in a work-based plan?
If you participate in an employer-sponsored retirement plan, you may be pleased to learn that you can save even more in 2025. The maximum amount you can contribute (your "elective deferrals") to a 401(k) plan will increase to $23,500 in 2025 (up from $23,000 in 2024). This limit also applies to 403(b) and 457(b) plans, as well as the Federal Thrift Savings Plan. If you're age 50 or older, you can also make catch-up contributions of up to $7,500 to these plans in 2025 (unchanged from 2024). Enhanced catch-up contribution for those turning age
60, 61, 62, or 63 in 2025 of $11,250. [Special catch-up limits apply to certain participants in 403(b) and 457(b) plans.]
The amount you can contribute to a SIMPLE IRA or SIMPLE 401(k) will increase to $16,500 in 2025 and the catch-up limit for those age 50
or older remains $3,500. Enhanced catch-up contribution for those turning age 60, 61, 62, or 63 in 2025 of $5,250. Note: Contributions can't exceed 100% of your income.
If you participate in more than one retirement plan, your total elective deferrals can't exceed the annual limit ($23,500 in 2025 plus any applicable catch-up contributions). Deferrals to 401(k) plans, 403(b) plans, and SIMPLE plans are included in this aggregate limit, but deferrals to Section 457(b) plans are not. For example, if you participate in both a 403(b) plan and a 457(b) plan, you can save the full amount in each plan — a total of $47,000 in 2025 (plus any catch-up contributions).
The maximum amount that can be allocated to your account in a defined contribution plan [for example, a 401(k) plan or profit-sharing plan] in 2025 is $70,000 (up from $69,000 in 2024) plus age 50 or older catch-up contributions. This includes both your contributions and your employer's contributions. Special rules apply if your employer sponsors more than one retirement plan.
Finally, the maximum amount of compensation that can be taken into account in determining benefits for most plans in 2025 is $350,000 (up from $345,000 in 2024), and the dollar threshold for determining highly compensated employees (when 2025 is the lookback year) increases to $160,000 (up from $155,000 when 2024 is the look-back year).
As always, our team at CNB Wealth Management is here to answer any retirement or financial planning questions you may have.