Some key retirement-related changes to watch for in 2025 include higher contribution limits for employer-sponsored retirement plans, such as 401(k) and IRA accounts. The Secure 2.0 Act, which became law in 2023, also introduces changes for Social Security and Medicare, including a small increase in Social Security benefits and higher Medicare premiums.
For employer-sponsored retirement plans, the contribution limits are increasing slightly in 2025. The annual contribution limit for 401(k), 403(b), governmental 457 plans, and the federal government’s Thrift Savings Plan will be $23,500, up from $23,000. The catch-up contribution limit for those 50 or older remains at $7,500, with a higher limit of $11,250 for workers aged 60 to 63.
For IRAs, the contribution limit stays at $7,000, with a catch-up contribution limit of $1,000 for individuals 50 and over. The income limits for IRA deductions and Roth IRA contributions have also been adjusted for 2025.
Health savings accounts (HSAs) are another important retirement tool, with contribution limits increasing slightly in 2025. The annual limit for individuals will be $4,300, up from $4,150, and $8,550 for family coverage, up from $8,300.
Social Security benefits will see a 2.5% cost-of-living adjustment in 2025, with Medicare premiums also increasing. The age at which you become eligible to claim 100% of your retirement benefit will depend on your birth year, with the Full Retirement Age settling at 67 for those born in 1960 and afterward.
Inheriting money, particularly an individual retirement account, will come with new rules in 2025. Non-spousal beneficiaries who inherited an IRA after 2019 must take required withdrawals annually until the account is emptied in the 10th year after the original owner’s death.
Overall, these changes highlight the importance of staying informed about retirement planning and being proactive in managing your retirement accounts and benefits. It’s always a good idea to consult with a financial advisor or retirement planning expert to ensure you’re making the most of these opportunities and adjustments.