401(k) Contribution Limits for 2025: What You Need to Know
Planning for retirement starts with knowing how much you can contribute to your 401(k). Every year, the IRS updates these limits to keep up with inflation. For 2025, the contribution limits have increased, giving you more room to grow your savings tax-deferred.
Here’s a quick breakdown of the 401(k) contribution limits for 2025, including catch-up contributions and employer match rules.
Employee Contribution Limit (2025)
- Under age 50: You can contribute up to $23,000 to your 401(k) in 2025.
- Age 50 and older: You’re allowed an additional $7,500 in catch-up contributions, for a total of $30,500.
These limits apply to traditional 401(k) and Roth 401(k) accounts combined.
Total Contribution Limit (Employee + Employer)
In 2025, the total contribution limit (including both employee and employer contributions) is:
- $69,000 for individuals under age 50
- $76,500 for individuals age 50 and older (with catch-up)
This includes:
- Your contributions
- Employer match or profit-sharing
- Any after-tax contributions (in applicable plans)
Roth vs Traditional 401(k)
You can split your contributions between Roth and traditional 401(k) options (if your employer offers both), but the combined limit remains $23,000 for 2025.
- Traditional 401(k): Pre-tax contributions, taxed upon withdrawal
- Roth 401(k): After-tax contributions, tax-free withdrawals
Contribution Deadline
Your 401(k) contributions must be made by December 31, 2025 to count for the 2025 tax year. Catch-up contributions follow the same deadline.
Employer Matching Contributions
Employers often match a percentage of your contributions—usually up to 3–6% of your salary. This doesn’t count toward your individual $23,000 limit, but it does count toward the overall $69,000 total.
Tip: Always contribute enough to get the full employer match—it’s free money.
Solo 401(k) Plans
If you’re self-employed, the 2025 contribution limits apply to you too. You can contribute as both:
- Employee: Up to $23,000 + catch-up if eligible
- Employer: Up to the overall limit of $69,000 or $76,500
Why Maxing Out Your 401(k) Matters
- Reduces taxable income (for traditional 401(k)s)
- Accelerates compound growth
- Maximizes employer match
- Boosts retirement security
Final Thoughts
Knowing the 401(k) contribution limits for 2025 helps you plan and save smarter. Whether you’re just starting or closing in on retirement, maximizing contributions within your budget can significantly boost your retirement outcome.
FAQs
Can I contribute to both a 401(k) and an IRA in 2025?
Yes, you can contribute to both, but income limits may affect IRA deductibility.
Do employer contributions count toward my $23,000 limit?
No, only your personal contributions count toward the $23,000 cap.
What if I over-contribute?
Excess contributions must be corrected by the tax filing deadline or you’ll face penalties.
Can I change my 401(k) contributions during the year?
Yes, most employers allow you to adjust contribution rates anytime.
Are Roth 401(k)s better than traditional?
It depends on your tax bracket now vs retirement. Many investors split between both.
