Wed Nov 06 14:40:00 UTC 2024: ## IRS Raises 401(k) Contribution Limits for 2025 to Account for Inflation

**WASHINGTON, D.C.** – The Internal Revenue Service (IRS) announced on Friday that it is increasing the contribution limits for 401(k) plans and similar retirement accounts for the 2025 tax year to account for inflation. The annual contribution limit for 401(k) plans will rise from $23,000 in 2024 to $23,500 in 2025, an increase of $500.

This adjustment applies to a range of retirement plans including 403(b) plans, governmental 457 plans, and the federal government’s Thrift Savings Plan.

While the IRS is maintaining the annual contribution limit for Individual Retirement Accounts (IRAs) at $7,000 for 2025, it has increased the deduction phase-out range for traditional IRAs and the contribution phase-out range for Roth IRAs.

For individuals covered by a workplace retirement plan, the traditional IRA contribution tax deduction phase-out range increases to between $79,000 and $89,000, up from $77,000 and $87,000 in 2024. For married couples filing jointly, the phase-out range rises to between $126,000 and $146,000.

The income phase-out range for Roth IRA contributions has also increased, rising to between $150,000 and $165,000 for individuals and heads of household, and between $236,000 and $246,000 for married couples filing jointly.

The IRS regularly reviews and updates contribution and eligibility thresholds for retirement accounts to account for the impact of inflation.

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