As we approach 2025, big changes are coming to 401(k) plans, offering new opportunities to supercharge your retirement savings. Whether you’re just starting your career or nearing retirement, choosing the right retirement plan is as important as ever.
In 2025, the standard 401(k) contribution limit is increasing, to $23,500 from $23,000 in 2024.
The big changes coming to the 401(k) in 2025
For those aged 60 to 63, there’s an extra reason to celebrate. Starting in 2025, you’ll be able to make catch-up contributions of up to $11,250 or 150% of the standard catch-up amount, whichever is greater. These “super” catch-up contributions allow them to potentially contribute up to $34,750 in total to their workplace retirement account.
This significant increase from the 2024 catch-up limit of $7,500 provides a fantastic opportunity to accelerate your savings as you near retirement.
If your employer introduces a new 401(k) plan in 2025, you will be automatically enrolled. This feature aims to increase participation and make saving easier. Initial contribution rates will start between 3% and 10% of your compensation, with annual increases of 1% until reaching no more than 15%.
The total contribution limit for both employee and employer contributions will rise to $70,000 too.
With all of these changes, it is a perfect time to invest in your retirement. If you aren’t to be automatically enrolled, speak to your employer.