by Nick Hill
The IRS has released the updated contribution limits for retirement plans in 2025. These changes apply to 401(k), IRA, SIMPLE IRA, and SEP IRA plans. The MAGI (Modified Adjusted Gross Income) phaseout ranges for IRA contributions will also increase in 2025.
Key Changes for 2025 Retirement Plan Contribution Limits
- 401(k), 403(b), 457 Plans: The contribution limit will increase to $23,500, up from $23,000 in 2024.
- Catch-Up 401(k), 403(b), 457 Plan Contributions: Individuals aged 50 and older can contribute an additional $7,500, unchanged from 2024
- IRA Contributions: The contribution limit for both traditional and Roth IRAs remains $7,000.
- Catch-Up IRA Contributions: Individuals aged 50 and older can contribute an additional $1,000, unchanged from 2024.
- SIMPLE IRA: The contribution limit will rise to $16,500, up from $16,000 in 2024. The catch-up contribution for individuals aged 50 and older remains $3,500.
- SEP IRA: The contribution limit for 2025 will increase to $70,000, up from $69,000 in 2024.
Traditional IRA Contributions and MAGI Limits (2025)
Taxpayers who meet the MAGI thresholds for traditional IRAs can deduct their contributions, but the amount of the deduction phases out as your MAGI increases. Phaseout ranges apply to the deductibility of contributions if a taxpayer (or his or her spouse) participates in an employer-sponsored retirement plan:
- Married Filing Joint, the phaseout range is specific to each spouse based on whether he or she is a participant in an employer-sponsored plan:
- For a spouse who participates, the 2025 phaseout range limits will increase by $3,000, to $126,000–$146,000.
- For a spouse who doesn’t participate, the 2025 phaseout range limits will increase by $6,000, to $236,000–$246,000.
- Single and Head-of-Household, participating in an employer-sponsored plan, the 2025 phaseout range limits will increase by $2,000, to $79,000–$89,000.
If your deduction is reduced or eliminated due to MAGI limits, you can still make nondeductible traditional IRA contributions. For 2025, the contribution limit remains $7,000 (plus an additional $1,000 catch-up contribution if you’re age 50 or older).
MAGI Phaseout Ranges for Roth IRA Contributions (2025)
- Single and Head-of-Household: $150,000 to $165,000
- Married Filing Joint: $236,000 to $246,000
If your MAGI falls within these ranges, your ability to contribute to a Roth IRA may be partially limited. If it exceeds the top of the phaseout range, you cannot contribute to a Roth IRA for 2025.
Summary of 2025 Retirement Plan Contribution Limits
| Type of Limitation | 2024 Limit | 2025 Limit |
| Elective deferrals to 401(k), 403(b), 457(b)(2) and 457(c)(1) plans | $23,000 | $23,500 |
| Annual benefit limit for defined benefit plans | $275,000 | $280,000 |
| Contributions to defined contribution plans | $69,000 | $70,000 |
| Contributions to SIMPLEs | $16,000 | $16,500 |
| Contributions to traditional and Roth IRAs | $7,000 | $7,000 |
| Catch-up contributions to 401(k), 403(b) and 457 plans for those age 50 or older | $7,500 | $7,500 |
| Catch-up contributions to 401(k), 403(b) and 457 plans for those age 60, 61, 62 or 63* | N/A | $11,250 |
| Catch-up contributions to SIMPLE plans for those age 50 or older | $3,500 | $3,500 |
| Catch-up contributions to SIMPLE plans for those age 60, 61, 62 or 63* | N/A | $5,250 |
| Catch-up contributions to IRAs for those age 50 or older | $1,000 | $1,000 |
| Compensation for benefit purposes for qualified plans and SEPs | $345,000 | $350,000 |
| Minimum compensation for SEP coverage | $750 | $750 |
| Highly compensated employee threshold | $155,000 | $160,000 |
* A change that takes effect in 2025 under SECURE 2.0