You will be able to contribute more money towards your retirement plans.

The Internal Revenue Service announced on Friday that it will allow contributions of up to $23,500 for 401(k) plans in 2025, up from this year’s limit of $23,000.

The same $23,500 limit will be in effect for 403(b), government 457 and federal employees’ Thrift Savings Plan (TSP).

The limit for annual contributions for IRAs is still $7,000 while the catch-up contribution also remains at $1,000. The catch-up is for people 50 or over and was amended to account for cost-of-living adjustments.

There is also a catch-up limit for people over 50 participating in 401(k), 403(b) 457 and TSP plans next year. It remains $7,500 for 2025 so that means they can contribute up to $31,000 when adding the normal and catch-up limits. For employees between the ages of 60 and 63, there is a higher catch-up limit of $11,250, or $34,750 total, the IRS said.

The government also adjusted how people can deduct contributions to IRAs, depending on the conditions they meet. For instance, a single taxpayer who has a workplace retirement has a phase-out range between $79,000 and $89,000, or a $2,000 increase over 2024.

To see all of the adjustments, visit the IRS website.

© 2024 Cox Media Group