Saving for retirement is one of the smartest things you can do. A 401(k) is a great way to grow your savings while lowering your taxes.
But every year, the IRS changes how much you’re allowed to put in your 401(k). These are called 401(k) contribution limits.
In this simple guide, we’ll break down the 401(k) contribution limits for 2025, explain what’s new, and show you how to use these rules to save more money for your future.
What Is a 401(k)?
A 401(k) is a special retirement account that lets you:
- Save part of your paycheck before taxes (Traditional 401(k)) or after taxes (Roth 401(k))
- Grow your money through investments
- Get possible “free money” if your employer matches your contributions
Think of it as your personal retirement piggy bank that your boss can also help fill.
401(k) Contribution Limits for 2025
Here’s what you can contribute in 2025, according to the IRS and financial experts:
| Type of Contribution | 2025 Limit | Who It Applies To |
|---|---|---|
| Employee Contribution | $23,500 | If you are under 50 |
| Catch-Up Contribution | +$7,500 | If you are 50 or older |
| Super Catch-Up (New 2025) | +$11,250 | If you are age 60–63 |
| Total Employee + Employer | $70,000 | Combined total limit |
| Compensation Cap | $350,000 | Max salary counted for benefits |
Step-by-Step: How the 2025 Limits Work
Step 1: Regular Limit
If you are under age 50, the most you can contribute is $23,500 from your paycheck.
Step 2: Catch-Up for Age 50+
If you turn 50 or older this year, you can add another $7,500, bringing your total to $31,000.
Step 3: Super Catch-Up (New for 2025)
If you are between ages 60 and 63, you can contribute an extra $11,250.
So, your total could be $34,750.
Step 4: Employer Match
Your employer can also add money to your 401(k). But your combined limit (you + your employer) cannot be more than $70,000.
Step 5: Salary Cap
The IRS says only the first $350,000 of your pay can be used to calculate 401(k) contributions.
Why the Limit Increased in 2025
Every year, the IRS adjusts the limits for inflation. Prices go up, so savings limits go up too.
For 2025:
- The regular limit increased by $500 (from $23,000 in 2024).
- The new “Super Catch-Up” rule (ages 60–63) was added under the SECURE 2.0 Act.
This helps older Americans save more as they get closer to retirement.
How to Maximize Your 401(k) in 2025
Here are simple tips to use these limits wisely:
- Contribute as early as possible.
Start at the beginning of the year. Your money grows longer with compounding. - Get your full employer match.
Don’t miss free money. Always contribute at least enough to get the full match. - Use the catch-up if you can.
If you’re 50 or older, take advantage of the extra room to save. - Don’t exceed the limits.
Going over can lead to taxes and penalties. Keep an eye on your paychecks. - Consider a Roth 401(k).
Pay taxes now, enjoy tax-free withdrawals later. Great if you expect to be in a higher tax bracket later. - Recheck every year.
Limits may change again next year—stay updated with IRS announcements.
Example: How It Works in Real Life
Let’s say:
- You are 52 years old
- Your employer matches 50% of what you contribute, up to 6% of your pay
- You earn $100,000 a year
If you contribute $23,500 + $7,500 = $31,000,
your employer adds about $3,000.
That’s $34,000 total in one year going into your retirement account — not bad!
FAQs — 401(k) Contribution Limits for 2025
Q1. What is the 401(k) contribution limit for 2025?
The limit is $23,500 for people under age 50.
Q2. How much can I contribute if I’m 50 or older?
You can add an extra $7,500, for a total of $31,000.
Q3. What’s the “super catch-up” for 2025?
If you’re 60–63, you can contribute $11,250 extra instead of $7,500.
Q4. What’s the total limit including employer match?
Together, you and your employer can contribute up to $70,000.
Q5. Does every company offer the super catch-up rule?
Not yet. Ask your HR department—some may take time to add it.
Q6. What if I go over the limit?
Your plan must correct it. You may owe taxes on the extra amount.
Q7. Can I have both a Roth and Traditional 401(k)?
Yes. But the total combined contribution must stay under the limit.
Final Thoughts
The 401(k) contribution limits for 2025 give you more chances to grow your retirement savings.
Remember:
- $23,500 is the regular limit.
- $7,500 extra if you’re 50 or older.
- $11,250 super catch-up if you’re 60–63.
- $70,000 total combined cap.
Start early, stay consistent, and take advantage of your employer match. Every dollar you save today helps you live better tomorrow.