The new year brings important updates to retirement savings, tax thresholds, and more.

Here’s a quick roundup of the changes to help you plan ahead:

401(k) and 403(b) Contribution Limits

In 2025, the employee contribution limit for 401(k) and 403(b) plans increases to $23,500 for those under 50 (up from $23,000 in 2024).

For those aged 50 and older, the $7,500 catch-up contribution remains in place. But if you’ll be 60-63 by the end of 2025, you can take advantage of the SECURE 2.0 super 401(k) catch-up contribution, adding an extra $11,250.

Total 401(k) Contribution Limits

Combined employee and employer contribution caps are also rising:

• Under 50: Up to $70,000 (from $69,000).
• 50 and Older: Up to $77,500.
• 60-63: Up to $81,250, including the SECURE 2.0 catch-up.

SEP IRA Contribution Limits

If you’re contributing to a SEP IRA, the limit increases to $70,000 in 2025 (up from $69,000).

Traditional and Roth IRA Contribution Limits

No changes here – contribution limits remain at $7,000 (or $8,000 for those 50 and older).

Roth IRA Phase-Out Ranges

• Single Filers: Phase-out range is $150,000–$165,000 (up from $146,000–$161,000).
• Married Filing Jointly: Phase-out range is $236,000–$246,000 (up from $230,000–$240,000).

HSA Contribution Limits

Health Savings Accounts (HSAs) see a boost:

• Individuals: Contribute up to $4,300 (up from $4,150).
• Families: Contribute up to $8,550 (up from $8,300).
• The $1,000 catch-up for those 55+ stays the same.

FSA Contribution Limits

Flexible Spending Account (FSA) contribution limits inch up to $3,300 (from $3,200 in 2024).

Social Security Updates

• Cost-of-Living Adjustment (COLA): Social Security benefits will increase by 2.5% in 2025, reflecting lower inflation.
• Taxable Income Threshold: Social Security tax applies to the first $176,100 of income (up from $168,600 in 2024).

Standard Deduction Increases

• Single Filers: Deduction rises to $15,000 (a $400 increase).
• Married Filing Jointly: Deduction rises to $30,000 (an $800 increase).

Annual Gift Tax Exclusion

The annual gift tax exclusion increases to $19,000 per recipient in 2025 (up from $18,000).

Lifetime Estate Tax Exemption

The estate tax exemption jumps to $13.99 million per individual in 2025 (up from $13.6 million in 2024), providing additional planning opportunities for high-net-worth individuals.

Final Thoughts

When it comes to financial planning, home runs are rare. Success is more about consistently hitting singles – small, smart decisions that add up over time.

Staying informed about annual changes and making the right adjustments is a simple yet powerful way to maximize your hard-earned money.

If you have any questions or want to explore how these updates impact your financial plan, our team is here to help.