IRS Announces 2025 IRA and 401(k) Contribution Limits

The Internal Revenue Service (IRS) posted its limits for contributions to IRA and 401(k) accounts for 2025. Here’s what you need to know when it comes to contributing to your retirement.

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For those under 50, Individual Retirement Accounts (IRA) are at $7,000. If you are over 50, the maximum contribution is $8,000.

If you have a 401(k), the maximum contribution limit is $23,500, with an increase of $500 if you are under 50, and $31,000 if you are 50 or over. If your employer offers match contributions, then these figures will increase.

• IRAs and 401K Plans Aren’t Always Safe in Bankruptcy

For the IRA, the maximum contribution limits remain unchanged for 2025. I’ve never understood why the IRS does that, and at the age of 52, I’m disappointed that the numbers have not increased for my IRA account.

Either way, maximum contribution should always be sought. I’ve posted numerous times before. Even if you cannot max out your contributions, you should still do your best. That means trying to get rid of debt and reducing your expenses so there’s more to contribute towards your financial future. Trust me, you’ll never complain about having too much money in your retirement accounts.

Reducing Your Debt and Saving Money

There are endless ways to reduce debt and start pursuing financial freedom. Please feel free to search my website. For example, with interest rates lower, now is the time to refinance your mortgage and pay off high-interest credit cards. Those savings can be applied toward your retirement accounts.

With a mortgage refinance, you can also lengthen when the mortgage is to be paid back. However, that comes with its pitfalls. While you will save money initially each month, you will pay more interest in the long run. But once you’re on track financially, you can make larger monthly payments on your mortgage to pay it off quicker.

Good luck to you, and I’ll meet you on the road to financial freedom as we begin our debt-free journey.

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Please note that the information on this site does not constitute legal advice and should be considered for informational purposes only.

Updated March 1, 2025.