IRS Increases Limits for Pension and Retirement Plan Contributions [Video]

The Internal Revenue Service (IRS) on Friday announced a new policy which increases the limits individuals can contribute to their pension and retirement plans.

The agency outlined the new contribution limits as part of its annual cost-of-living adjustments for pension plans and other retirement accounts.

What Are the Increases?

The contribution limit for 401(k) plans will rise in 2025, allowing individuals to set aside up to $23,500, an increase from the $23,000 cap in 2024.

Employees enrolled in 403(b) plans and the federal government’s Thrift Savings Plan will also see their annual contribution limit rise to $23,500 in 2025, up from $23,000 in 2024.

“The catch-up contribution limit that generally applies for employees aged 50 and over who participate in most 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan remains $7,500 for 2025. Therefore, participants in most 401(k), 403(b), governmental 457 plans and the federal government’s Thrift Savings Plan who …