The IRS sets new contribution limits for 2025 [Video]

LINCOLN, Neb. (KOLN) – Beginning this year, people can save more money on employer-sponsored retirement plans.

In 2024, the IRS announced its new individual retirement contribution limits. It refers to the amount of money folks can set aside each year in their 401(k) and IRAs.

For example, employees can now defer $23,500 into workplace plans. It’s a $500 increase from last year. The change applies to 401(k), 403(b), and 457(b) plans, as well as Federal Thrift saving plans.

Sam Taube an investments writer for NerdWallet said a slight increase by the IRS typically is a response to inflation.

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

He added that the limit on annual contributions to an IRA …