January (or late December) is a good time to make sure your retirement contributions are on track to be maximized for the upcoming year, if cash flow allows. These thresholds are higher for 2025 than they were for 2024, so if you were already maximizing them in 2024, an adjustment may be necessary. In addition, there’s a new law that allows those aged 60-63 to contribute an even larger amount.
The new limits are $23,500 per year or ~$1,959 per month for those under the age of 50. For those who are over or will achieve the age of 50 during 2025, the limit is $31,000 for the year or ~$2,584 per month.
Beginning in 2025, those who turn 60-63 by the end of 2025 are eligible for an increased “catch up” contribution. This would increase their annual maximum contribution to $34,750, or ~$2,896 per month. After age 63, the maximum is the $31,000 stated above.
These limits apply to 401k, 403b, and 457 accounts. Making the adjustment as early in the year as possible, or in late December to be picked up on the first payrolls of January, will help to ensure you will hit the maximum by the end. Your Bluestem meetings where we look at your progress towards the maximum would be several months into the year, and could result in a “late” adjustment to get you on track for the maximum.
Contact your HR, or payroll provider to make the adjustment. Or, if you are with the University of Illinois, you can make the adjustment at the following links:
403b: https://www.hr.uillinois.edu/benefits/retirement/403b/sra
457: https://www.hr.uillinois.edu/benefits/retirement/457/enroll
IRA and Roth IRA limits remain the same as 2024, with the under 50 maximum at $7,000 for the year and the 50 and over maximum at $8,000 for the year.