By Dr. Jim Dahle, WCI Founder

Contribution limits for 401(k)s, 403(b)s, 457(b)s, IRAs, Roth IRAs, HSAs, FSAs, SIMPLE IRAs, and SEP-IRAs are all indexed to inflation. While the retirement contribution limits do not go up every year and while every account does not use the same formula for when there will be an increase, you will generally see an increased contribution every year or two.

Inflation exploded in 2022, all the way up to 9.1% in July, and as a result, the 2023 contribution limits for many of these accounts were increased in a relatively significant way. But inflation has been tamed in the past two years, and as a result, the increases in those limits for 2025 aren’t quite as extravagant. If you know the latest inflation numbers, it is possible to calculate the increase even before the IRS announces it in October or November (in 2023, the IRS officially released its figures on November 1).

Note that the Secure Act 2.0 passed in 2022 will eventually change catch-up contributions in significant ways. The 401(k)/403(b) catch-up for those 50+ has always been indexed to inflation. But originally the law stated that, starting in 2024, if you have a Modified Adjusted Gross Income of $145,000+ (indexed to inflation), those catch-up contributions would now have to come on the Roth side. That means tax-deferred catch-up contributions would no longer be allowed for these high earners.

In August 2023, though, the IRS announced that it was pushing back that provision until 2026. That means for the next few years, your catch-up contributions can come either via the traditional method or via Roth.

Also remember that in 2025, catch-up contributions will be increased even more for those who are 60-63 years old (it’ll be the larger of $10,000 or 50% more than the regular catch-up contributions).

Until then, here are the limits for 2025 retirement plan contributions (we’ll update this post when the IRS officially announces the 2025 changes).

2025 401(k) and 403(b) Employee Contribution Limit

The total employee contribution limit to all 401(k) and 403(b) plans for those under 50 will be going up from $23,000 in 2024 to $23,500 in 2025. The catch-up contribution limit will stay the same at $7,500 in 2025, so if you’re 50+, your 401(k) employee contribution limit will be $31,000 in 2025.

But if you are aged 60-63 by the end of 2025, your catch-up contribution will be $11,250.

2025 401(k)/403(b)/401(a) Total Contribution Limit

The total of all employee and employer contributions per employer will increase from $69,000 in 2024 to $70,000 in 2025 for those under 50. With the catch-up remaining at $7,500, the total contribution for those 50+ will be $77,500. If you’re 60-63, that contribution increases to $81,250.

Note that the 401(a) limit is separate from the 403(b) limit. So, you could theoretically get $70,000 into each of them.

2025 457(b) Contribution Limit

457(b) contribution limits will increase from $23,000 in 2024 to $23,500 in 2025. 457(b)s have unique catch-up contribution rules, so consult with your plan administrator if you are interested in putting more in your 457(b).

2025 Traditional and Roth IRA Contribution Limits

IRA contribution limits and catch-up contributions will remain the same from 2024. That means you can contribute $7,000 or $8,000 if you’re 50 in 2025.

2025 SEP-IRA Contribution Limits

SEP-IRA contribution limits will increase to $70,000 per year for 2025, up from $69,000 in 2024.

2025 SIMPLE IRA and SIMPLE 401(k) Contribution Limits

The SIMPLE IRA and SIMPLE 401(k) contribution limits will increase from $16,000 in 2024 to $16,500 in 2025.

2025 Health Savings Account (HSA) Contribution Limits 

For single people, the HSA contribution limit will increase from $4,150 in 2024 to $4,300 in 2025. Family coverage will increase from $8,300 to $8,550. The $1,000 catch-up contribution for those 55+ remains the same.

2025 Flexible Savings Account (FSA) Contribution Limits

Healthcare FSA contribution limits will increase from $3,200 in 2024 to $3,300 in 2025. Note that there are other types of FSAs (such as dependent care FSAs) with different limits.

Other Interesting Increases

The 401(a) compensation limit (the amount of earned income that can be used to calculate retirement account contributions) will increase from $345,000 in 2024 to $350,000 in 2025. This is always 5X the maximum 401(k) plan total contribution limit.

The deductibility phaseout for IRA contributions for those with a retirement plan at work increases from $77,000-$87,000 in 2024 for singles to $79,000-$89,000 in 2025, and it’ll move from $123,000-$143,000 in 2024 for those Married Filing Jointly to $126,000-$146,000 in 2025.

The Roth IRA Direct Contribution Limit phaseout will increase from $146,000-$161,000 in 2024 for singles to $150,000-$165,000 in 2025 and from $230,000-$240,000 for 2024 for those Married Filing Jointly to $236,000-$246,000 in 2025. If your MAGI is above that, you’ll need to contribute indirectly via the Backdoor Roth IRA process.

While Social Security benefits increased by 8.7% for 2023, the bumps for 2024 and 2025 were much more modest at 3.2% and 2.57%, respectively.

The definition of a highly compensated employee was $155,000 in 2024. In 2025, that number has increased to $160,000.

While it feels like all of these are increases, they are really just keeping up with inflation. They’re just cost of living increases. On a real (after-inflation) basis, they’re basically the same as this year.

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What do you think? Are you surprised by any of these? Are you glad they’re indexed to inflation? Comment below!