One of the best benefits of a the 2025 401(k) rule change is the ability to save for your retirement with higher contribution limits than many other savings accounts. In 2025 adults under 50 can contribute up to $23,500 to their 401(k) not including any contributions their employers may match.
For adults aged 50 and above there is even more good news. In 2025 this group can set aside up to $31,000 in a 401(k). But thanks to a recent rule change some workers in this age group can now save even more. To learn about how to maximize your savings check out our guide on $2,000 Thanksgiving Stimulus Check: What’s Official Status?
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A New Opportunity for Adults Aged 60 to 63
Adults aged 60 to 63 have been given an exciting chance to make larger contributions than ever before. Before the additional $7,500 that adults 50 and older could contribute to their 401(k) known as a catch up contribution was the maximum amount.
Starting in January 2025 a new rule under the SECURE 2.0 Act has raised this catch up contribution limit for those between the ages of 60 and 63. Now people in this age group can contribute up to $11,250 on top of the standard $23,500 contribution limit. That means by the end of 2025 they could contribute a total of $34,750 to their 401(k). This number could increase even more in the future as inflation adjustments come into play.
It’s important to note that this higher catch up contribution is only available to workers between the ages of 60 and 63. Once you turn 64 the contribution limit drops back to the regular $7,500 catch up contribution but it could also increase in future years depending on inflation.
How to Make the Most of Your the 2025 401(k) Rule change Contributions in 2025
These higher contribution limits are great news if you’re in a financial position where you can afford to put away extra money into your 401(k). For those with higher salaries these larger contributions can be an excellent way to lower your taxable income while saving for retirement.
But not everyone will be able to take advantage of catch up contributions especially if they have lower salaries. But don’t worry there are still ways to make the most of your 401(k). Even if you can’t contribute the full $31,000 or $23,500 every dollar you put into your 401(k) counts and helps you get closer to a comfortable retirement.
If your employer offers a 401(k) match be sure to take advantage of it. The match is free money from your employer and it can really help your savings grow. Check with your HR department to find out exactly how much you need to contribute to get the full match. Once you know that amount divide it by the number of pay periods left in the year to figure out how much to save per paycheck.
If you’re interested in making more money, check out our article on $600+$750 Stimulus Checks for 2025: Truth, Eligibility, and Application Process.
Understanding 401(k) Catch-Up Contributions
If you’re over 50, the 401(k) catch-up contribution is a great way to increase your retirement savings. This special rule allows you to save more money for your retirement beyond the standard contribution limit. For 2025, this limit is $7,500, which means you can set aside more money as you get closer to retirement. The catch-up contribution could make a big difference, especially if you’re playing catch-up on your retirement savings.
FAQs
What is the 2025 401(k) contribution limit for people under 50?
In 2025, adults under 50 can contribute up to $23,500 to their 401(k) accounts, not including any employer match.
Can people over 50 save more in their 401(k)?
Yes, adults aged 50 and older can contribute up to $31,000 to their 401(k) in 2025. This includes a $7,500 catch-up contribution.
How much can adults aged 60 to 63 contribute?
Thanks to a new rule under the SECURE 2.0 Act, adults aged 60 to 63 can contribute up to $34,750 in 2025. This includes the $23,500 standard contribution plus an additional $11,250 in catch-up contributions.
Can I still contribute to my 401(k) if I can’t make the maximum contribution?
Absolutely! Even if you can’t reach the maximum contribution limit, every dollar you put into your 401(k) is important for your retirement. Contribute as much as you can, and if your employer offers a match, be sure to take full advantage of it.
Final Thoughts
Thanks to the new rule changes in 2025, those over 50, especially adults aged 60 to 63, now have an excellent opportunity to save even more for retirement. If you can take advantage of these higher contribution limits, it can help you save more for the future while lowering your taxable income today. Remember, every little bit counts when it comes to retirement, so start contributing as much as you can and take advantage of any employer match.