Nov. 1 (UPI) — The Internal Revenue Service on Friday announced the 2025 contribution limits for 401(k) and Individual Retirement Arrangement plans.
Yearly contribution limits for 401(k) plans increased to $23,000 from $22,500 last year, the IRS confirmed in a release.
Catch-up contributions made by those age 50 and older to IRA plans remain the same at $1,000.
Individuals can deduct contributions to a traditional IRA if they meet certain required conditions.
The amount one person can contribute to their Savings Incentive Match Plan for Employees or SIMPLE, increased to $16,000, up from $15,500 last year. Catch-up contribution limits for SIMPLE plan contributions remain unchanged at $3,500 for those people age 50 or older.
Phase-out ranges for IRA deductibility in 2025 have also been increased to between $123,000 and $143,000, up from between $116,000 and $136,000 last year.
Friday’s announcement by the IRS comes a little over three weeks after the Social Security Administration announced recipients will get a 2.5% benefits increase next year.
Earlier this week, the Commerce Department confirmed the Federal Reserve’s key inflation rate, the personal consumption expenditures price index, increased in line with expectations in September.
