Now that we are in 2025, it's essential to stay informed about the updated contribution limits for various tax-advantaged accounts. Here's a comprehensive overview to help you plan your savings and investments effectively.
Individual Retirement Accounts (IRAs) and Roth IRAs
Contribution Limit: The annual contribution limit for both Traditional and Roth IRAs remains at $7,000 for 2025.
Catch-Up Contributions: Individuals aged 50 and over can contribute an additional $1,000, bringing their total contribution limit to $8,000.
Important Tip: ROTH IRAs and Traditional IRAs both have income limits that you need to be aware of before you contribute.
Pro Tip: Ask us about advanced strategies if you are up against those limits.
401(k) Plans
Contribution Limit: The employee contribution limit for 401(k) plans has increased to $23,500 for 2025, up from $23,000 in 2024.
Catch-Up Contributions:
Ages 50 and Over: Individuals aged 50 and over can make an additional catch-up contribution of $7,500, allowing for a total contribution of $31,000.
Ages 60 to 63: A new provision permits individuals aged 60 to 63 to make a "super catch-up" contribution of up to $11,250, increasing their total potential contribution to $34,750.
SIMPLE IRAs
Contribution Limit: The contribution limit for SIMPLE IRAs has increased to $16,500 for 2025.
Catch-Up Contributions:
Ages 50 and Over: Individuals aged 50 and over can make an additional catch-up contribution of $3,500, bringing the total to $20,000.
Ages 60 to 63: Those aged 60 to 63 can contribute an additional $5,250 as a catch-up contribution, allowing for a total contribution of $21,750.
Health Savings Accounts (HSAs)
Contribution Limits:
Self-Only Coverage: The contribution limit for individuals with self-only coverage is $4,150.
Family Coverage: For those with family coverage, the limit is $8,300.
Catch-Up Contributions: Individuals aged 55 and older can contribute an additional $1,000, making the total $5,150 for self-only coverage and $9,300 for family coverage.
Important Tip: You must have an IRS qualifying High Deductible Health Plan to qualify for an HSA.
529 Plans
Federal Contribution Limits: While there are no annual contribution limits for 529 plans at the federal level, contributions are considered gifts for tax purposes. In 2025, the annual gift tax exclusion is $17,000 per beneficiary.
Montana State Tax Benefits: Montana residents can deduct contributions to any 529 plan from their state taxable income, up to $3,000 per taxpayer per year ($6,000 for married couples filing jointly).
Important Consideration: 529 Plans were revamped and are worth taking a fresh look at for your children or grandchildren.
Choosing the Right Plan for Your Needs
Selecting the appropriate savings or retirement plan depends on various factors, including your income, age, retirement goals, and tax considerations. At JA Swanson Agency, we're here to assist you in making informed decisions tailored to your unique financial situation.
Call to Action
Not sure which plan suits your business or personal situation best? Let us help you make the right decision from a tax perspective. Contact us today to schedule a consultation.
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