The 401(k) retirement savings plan is undergoing changes in 2025 aimed at enhancing retirement savings opportunities for many Americans, particularly older workers. The new rules include higher contribution limits, increased catch-up contribution limits for certain age groups and automatic enrollment.
Why It Matters
The changes to the 401(k) plan in 2025 are designed to address the growing need for better retirement savings options. According to Bankrate’s latest Retirement Savings Survey, 57 percent of Americans believe they are falling behind on their retirement savings. This includes people working full-time, part-time or who are temporarily unemployed.
The average 401(k) balance across all age groups in 2023 was approximately $134,128, according to Vanguard’s How America Saves 2024 report. But a few accounts with “very large” balances are outliers, which makes that number look more favorable.
As Vanguard notes, “The median …