Mon Dec 30 12:20:00 UTC 2024: ## Retirement Savings Get a Modest Boost in 2025, But Medicare Premiums Rise

**New York, NY** – Retirement savers will see some positive changes in 2025, but increased Medicare costs will offset some of the gains. Higher contribution limits for various retirement plans and provisions from the Secure 2.0 Act are boosting savings potential, while adjustments to Social Security and Medicare will impact retirees’ finances.

**Retirement Plan Contributions:** The annual contribution limit for 401(k), 403(b), 457 plans, and the Thrift Savings Plan increases to $23,500 (up from $23,000), with catch-up contributions for those 50 and older remaining at $7,500. However, those aged 60-63 benefit from a higher catch-up limit of $11,250 under Secure 2.0. IRA contribution limits remain unchanged at $7,000, with a $1,000 catch-up contribution for those 50 and older. Income limits for IRA deductions and Roth IRA contributions are also increasing. The Saver’s Credit income limits have also been raised. HSA contribution limits are also slightly higher in 2025.

**Social Security and Medicare:** Social Security recipients will receive a 2.5% cost-of-living adjustment (COLA), adding roughly $50 to the average monthly benefit. Conversely, Medicare Part B premiums are rising by $10.30 to $185 per month, and the annual Part B deductible increases by $17 to $257. The Social Security Administration (SSA) is implementing appointment scheduling for in-person services starting January 6th, although online and phone services remain available. Full retirement age will reach 67 for individuals born in 1960 and later. The maximum taxable earnings for Social Security are increasing to $176,100.

**Secure 2.0 Act Impacts:** The Secure 2.0 Act mandates automatic enrollment in 401(k) and 403(b) plans for eligible employees, and expands eligibility for part-time workers. It also introduces stricter rules for inherited IRA withdrawals, eliminating the “stretch” provision for most non-spousal beneficiaries.

These changes highlight a mixed picture for retirement in 2025, with increased contribution limits offering some relief balanced against rising healthcare costs and changes in Social Security and IRA withdrawal rules. Individuals are encouraged to review their retirement plans and adjust their strategies accordingly.

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