Make the most of your retirement savings options and secure a stable future.
At Dominion Wealth Management, we understand that planning for retirement is one of the most important aspects of financial well-being. Each year, the IRS adjusts contribution limits for retirement accounts to account for inflation, providing savers with new opportunities to grow their nest eggs. In 2025, increased contribution limits and income restrictions bring valuable benefits, particularly for those utilizing 401(k)s, IRAs, and catch-up contributions. Below, we’ve outlined the key updates to help you make the most of these changes.
401(k) Contribution Limits
For 2025, the IRS has increased the contribution limit for 401(k) plans, allowing employees to defer up to $23,000 of their salary, up from $22,500 in 2024. This increase provides an excellent opportunity for workers to save more while benefiting from the tax advantages of these employer-sponsored plans.
For employees aged 50 and older, the catch-up contribution limit has also risen. In 2025, eligible participants can contribute an additional $8,000, bringing the total maximum contribution to $31,000. This adjustment is particularly beneficial for those looking to accelerate their retirement savings as they near their retirement years.
IRA Contribution Limits
The 2025 contribution limit for Individual Retirement Accounts (IRAs) has been set at $7,000 for both traditional and Roth IRAs. Individuals 50 and older can contribute an extra $1,000 as a catch-up contribution, allowing for a total of $8,000 in annual IRA contributions.
Income Restrictions for IRAs
While these increased contribution limits provide more room to save, it’s essential to understand the income restrictions that apply, particularly for Roth IRAs and deductible traditional IRAs.
Roth IRA Income Limits
In 2025, the income phase-out ranges for Roth IRA contributions have been adjusted as follows:
Single filers & heads of household: $150,000 - $165,000 (previously $138,000 - $153,000 in 2024).
Married filing jointly: $230,000 - $245,000 (previously $218,000 - $233,000 in 2024).
Individuals earning above these thresholds will see their ability to contribute to a Roth IRA reduced or eliminated.
Traditional IRA Deductibility Limits
If you or your spouse participates in a workplace retirement plan, your ability to deduct traditional IRA contributions depends on your Modified Adjusted Gross Income (MAGI). The updated phase-out ranges for 2025 are:
Single filers: $75,000 - $85,000 (up from $73,000 - $83,000 in 2024).
Married filing jointly (if covered by a workplace plan): $125,000 - $145,000 (up from $116,000 - $136,000 in 2024).
Spouse not covered by a workplace plan but married to someone who is: $208,000 - $228,000 (up from $204,000 - $224,000 in 2024).
Saver’s Credit Income Limits
For low- and moderate-income savers, the Saver’s Credit provides an added incentive to contribute to retirement accounts. The adjusted gross income (AGI) limits for 2025 are:
Single filers: Up to $36,000.
Heads of household: Up to $54,000.
Married filing jointly: Up to $72,000.
Other Retirement Plans
Other tax-advantaged retirement plans also see increases in contribution limits:
403(b), 457(b), and Thrift Savings Plan (TSP): Follow the same new 401(k) limits of $23,000 (or $31,000 with catch-up contributions).
SIMPLE IRA: The contribution limit has risen to $16,000, with a $3,500 catch-up contribution for participants aged 50 and older.
Key Takeaways for 2025
Higher Contribution Limits: Maximize your tax-deferred or tax-free savings with the increased limits.
Catch-Up Contributions: If you’re 50 or older, take advantage of the enhanced limits to grow your retirement savings.
Income Restrictions Matter: Monitor your income levels to determine Roth IRA and deductible traditional IRA eligibility.
Strategic Planning is Key: Now is the perfect time to review your retirement savings strategy and ensure you’re making the most of these changes.
Take Control of Your Retirement Future
Navigating retirement contributions and income limits can be complex, but you don’t have to do it alone. At Dominion Wealth Management, we specialize in personalized retirement planning to help you maximize your savings potential and achieve financial security. Schedule a consultation with our team today to discuss how these changes impact your retirement strategy and create a customized plan that works for you.
Contact our office today to get started!
Source: Copyright © 2025 FMeX. All rights reserved. Distributed by Financial Media Exchange. Rev.01.24.25
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