401(k) Contribution Limits 2025: Maximize Retirement Savings
See 2025 401(k) and 403(b) limits, catch-ups (including the new age 60–63 super catch-up), employer match rules, and strategies to hit your goals with minimal taxes.
Pair this guide with EverydayBudd's Take-Home Pay, Capital Gains Tax, and Compound Interest tools to build a tax-smart plan.
Introduction
The IRS has increased several retirement plan limits for 2025. Most workers can now defer $23,500 to a 401(k)/403(b)/TSP, while the overall defined-contribution plan limit rises to $70,000 (employer + employee, excluding catch-ups). Age-50+ savers still get a $7,500 catch-up, and a new age-60–63 super catch-up of $11,250 applies in eligible plans.
Maximizing your 401(k) in 2025 means (1) knowing your personal limit, (2) coordinating employer match + profit sharing under the $70k plan cap, and (3) using Roth vs pre-tax contributions (and required Roth catch-ups for some high earners) to optimize lifetime taxes.
Understanding the Basics
Key Terms Explained
- Elective deferral limit (§402(g)) — You personally can contribute $23,500 across all 401(k)/403(b)/TSP plans in 2025.
- Catch-up contributions (age 50+) — Extra $7,500 for 2025 (separate from plan cap). Age 60–63 may contribute $11,250 instead (non-SIMPLE plans).
- Plan "annual additions" limit (§415(c)) — $70,000 total from you + employer (match/nonelective/profit sharing). Catch-ups are on top of this cap.
- Compensation cap (401(a)(17)) — Employer contributions can only consider up to $350,000 of compensation in 2025. HCE threshold rises to $160,000.
- Roth catch-up rule (SECURE 2.0) — If your prior-year W-2 wages with that employer ≥ $145,000, any 401(k)/403(b) catch-ups must be Roth in 2025 (not pre-tax).
Step-by-Step Guide
Use EverydayBudd's Retirement & Tax tools to model your exact paycheck and annual tax.
Step 1 — Pick your contribution strategy
Set your 2025 target: up to $23,500 (employee), plus $7,500 (age 50+) or $11,250 (age 60–63) if eligible.
Choose pre-tax vs Roth by comparing your current bracket vs expected retirement bracket (and check if Roth catch-up is required).
Step 2 — Capture the full employer match (then automate)
Confirm your plan's match formula (e.g., 50% on 6%).
Set paycheck deferrals so you don't "front-load" too early and miss match in later pay periods (unless your plan has a true-up).
Step 3 — Coordinate the plan cap
Sum your deferrals + employer match/nonelective + profit sharing and ensure totals do not exceed $70,000 (catch-ups excluded).
If you change jobs mid-year, track your §402(g) usage across employers so you don't exceed $23,500.
Dial In Your Per-Paycheck Amount
Model pre-tax vs Roth and catch-ups, then see your net pay impact instantly.
Advanced Strategies
- Mega backdoor Roth (if plan allows after-tax + in-plan Roth conversions): Fill space under the $70k cap with after-tax contributions, then convert to Roth (subject to plan rules and ACP testing).
- Age-60–63 "super catch-up" planning: Schedule deferrals to fully use the $11,250 window; this is Roth-eligible/required if you meet the $145k wage threshold.
- Two plans in one year: Your employee deferral limit stays one number ($23,500), but each employer plan has its own $70k cap—coordinate carefully.
- SIMPLE & SIMPLE 401(k): 2025 elective deferral $16,500; age-50+ catch-up $3,500; age 60–63 higher catch-up $5,250.
- IRA alongside 401(k): 2025 IRA limit $7,000 (+$1,000 catch-up). Deductibility and Roth eligibility phaseouts increased; check MAGI.
Common Mistakes to Avoid
- Exceeding the $23,500 employee limit by contributing at two employers—results in excess deferrals you must remove by April 15 next year.
- Assuming catch-ups count toward $70k (they don't). Misunderstanding this can leave employer dollars on the table.
- Ignoring Roth-catch-up requirement if prior-year wages ≥ $145k—plans may reject pre-tax catch-ups.
- Front-loading without a true-up and losing match in later pay periods.
- Not revisiting pre-tax vs Roth when your income or state tax changes.
Frequently Asked Questions
Frequently Asked Questions
Conclusion & Next Steps
Get your 2025 plan dialed in now.
Action Items
- Set your per-paycheck percentage to reach $23,500 (and catch-up if eligible) without missing employer match.
- If wages ≥ $145k, ensure your catch-ups are Roth in 2025.
- Coordinate with HR to avoid excess deferrals when switching jobs.
- Model pre-tax vs Roth and mega backdoor scenarios in our calculators to hit your lifetime tax sweet spot.
Related Tools & Guides
Max Your 401(k) with a Paycheck-Safe Plan
Set your percentage, protect your match, and choose the right pre-tax/Roth mix.
References
- IRS Notice 2024-80 — 2025 amounts relating to retirement plans and IRAs (elective deferrals, plan caps, catch-ups, SIMPLE limits, HCE threshold, compensation cap).
- IRS COLA tables — Dollar limitations for 2025 (401(k)/403(b) limits, comp caps).