February 4, 2025
Contributing to your workplace retirement plan is a great way to start your savings journey. Additionally, pretax contributions to an employer-sponsored tax-deferred plan can help reduce your current taxable income, while saving for retirement with dollars that would otherwise be spent on taxes. The IRS has announced the updated contribution and compensation limits for retirement plans for the 2025 tax year, offering a prime opportunity to maximize your savings through the ACC Voluntary Savings Program.
Key Changes for 2025:
- 401(k), 403(b), and most 457 plans: The annual contribution limit increases to $23,500 (up from $23,000 in 2024).
- Catch-up contributions: For individuals aged 50 and older, the catch-up contribution limit remains $7,500, allowing you to contribute a total of $31,000 in 2025.
- Special Catch-up for 403(b), 457(b), and 401(k) plans (age 60-63): The new catch-up contribution limit for this age group is $11,250.
- Annual compensation limit: The compensation limit increases to $350,000 (up from $345,000 in 2024).
Next Steps:
- New to the program? Check out the Annual Retirement Benefits Guide at US Omni and TSACG Compliance Services.
- Already participating? Review your current contribution strategy and consider increasing your contributions to take full advantage of these new limits for 2025.