IRS raises some limits for retirement contributions [Video]

(InvestigateTV) — The IRS announced in late 2024 new individual retirement contribution limits for 2025.

This means participants can now defer $23,500 into workplace plans, a $500 dollar increase from last year. The change applies to 401(k)s, 403(b) and the majority of 457(b) plans, as well as the federal Thrift Savings Plan.

Sam Taube with NerdWallet said a slight increase like this by the IRS is usually in response to inflation.

“This year was a little bit different in that they did announce a $500 increase to the contribution limit for 401(k)s, but for the first time in a while they actually kept the IRA limit unchanged this year.”

Taube said the limit on annual contributions to an IRA remains $7,000, the same as in 2024.

He encouraged people to talk to a financial advisor, many of whom say to utilize their company’s 401(k) whenever possible because employers often offer a match, which is essentially free …