As we look forward to 2025, now is a great time to review the changes that will impact your retirement plan contribution limits, gifting limits, social security increase and Medicare premium changes for the next year. Here’s a summary of those changes, which can help you assess how they fit within your overall financial life plan.
IRA Contribution Limits
The maximum amount you can contribute to a Traditional or Roth IRA remains $7,000 in 2025 (or 100% of your earned income, if less). The catch-up contribution for individuals aged 50 or older is also unchanged at an additional $1,000. You can contribute to both types of IRAs, but total contributions cannot exceed the $7,000 (plus catch-up, if applicable) annual limit across accounts. Keep in mind that income limits and
tax deductibility rules apply to both types of IRAs.
Traditional IRA Income Limits
The income limits for deducting Traditional IRA contributions increased for 2025:
- Single/Head of Household: You can fully deduct your IRA contribution if your modified adjusted gross income (MAGI) is less than $79,000 (up from $77,000 in 2024).
- Married Filing Jointly: The full deduction is available if your MAGI less than $126,000 (up from $123,000 in 2024). If your spouse is covered by a retirement plan and you are not, you can fully deduct your IRA contribution with a MAGI of $236,000 or less (up from $230,000 in 2024).
Roth IRA Income Limits
Roth IRA contribution eligibility income limits have increased as well:
- Single/Head of Household: Full contributions are allowed with a MAGI less than $150,000 (up from $146,000 in 2024).
- Married Filing Jointly: Full contributions are allowed with a MAGI less than $236,000 (up from $230,000 in 2024).
Employer Retirement Plans
For 2025, elective deferral limits for 401(k), 403(b), most 457 plans, and the Federal Thrift Savings Plan have increased:
- Contribution Limit: $23,500 (up from $23,000 in 2024).
- Catch-up Contribution: For those aged 50 and older, the catch-up limit is $7,500 ($31,000 total). Additionally, workers aged 60 to 63 can contribute an enhanced catch-up contribution of $11,250 ($34,750 total) due to the Secure 2.0 Act’s new catch-up provision.
For SIMPLE IRAs, the contribution limit is now $16,500, with a $3,500 catch-up limit ($20,000 total) for those aged 50 and older.
Health Savings Account (HSA) Limits
For 2025, contribution limits for HSAs are higher:
- Individual Coverage: $4,300 (up from $4,150 in 2024)
- Family Coverage: $8,550 (up from $8,300 in 2024)
- Catch-Up Contribution: Individuals aged 55 or older can contribute an additional $1,000
Qualified Charitable Distributions (QCD)
The QCD limit, which was previously capped at $100,000, began to adjust annually for inflation starting in 2024. The limit for 2025 is set at $108,000 per person, allowing individuals over 70.5 to make tax-advantaged charitable donations from IRAs.
Medicare and Social Security Adjustments
The Social Security cost-of-living adjustment (COLA) is 2.5% for 2025. Updated Medicare Part B and Part D premiums for 2025 are expected to increase but have not yet released; consult the Center for Medicare & Medicaid Services (CMS) for the latest information as these rates are finalized.
Annual Gift Tax Limit
For 2025, the gift tax limit has risen to $19,000 per individual gift (from $18,000 in 2024). Married couples can gift up to $38,000 jointly without triggering gift tax filing requirements.
If you have any questions about how these new 2025 figures might affect your financial life plan, please contact your JNBA Advisory Team.
JNBA is not an accountant and no portion of the above should be construed as accounting advice. All accounting issues should be addressed with an accounting professional of your choosing.
Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from JNBA Financial Advisors, LLC.
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