SUPER Retirement Contributions In 2025

Special Note: Please consult a certified financial planner and/or tax professional when making financial decisions around tax advantaged accounts.

You’ve heard it, I’ve heard it… we’ve all heard it: saving for retirement is extremely important! There WILL come a day when you want to stop earning an income through your hands, your back, and your brain. Father time is undefeated, let’s give our golden years the respect they deserve.

The good news is that it’s easier than ever to start allocating more funds in this direction. Check out this post on Retirement Vehicles to help determine which route works best for you!

The IRS will review cost-of-living, and adjust contribution limits to retirement accounts accordingly. This coming year, we are looking at an increase to our 401(k) / 403(b) / 457 plans of $500. Unfortunately, no increase to IRA contributions.

This means that a Savvy Solo with a standard W-2 type job will be able to contribute a total of $30,500 ($23,500 to 401(k) + $7,000 to IRA) in 2025! Hooray! Savvy Solos over the age of 50 by the end of the year will be able to contribute $39,000 ($31,000 + $8,000) in 2025! Holy cow! You’ll want to determine the best allocation between pre-tax and post-tax (Roth) contributions, but we’ll cover that in a future post.

Thanks to some positive changes made to the Secure 2.0 Act, Savvy Solos between the ages of 60-63 have a SUPER 🤪 opportunity to put in an additional $3,750 to their catch-up contributions. This means they can contribute a total of $42,750 in tax advantaged retirement accounts! Holy savings Batman! Get that Savvy Solo a cape!

This provision to retirement contribution limits really helps the older workers to make up for years of pushing this off. It can also help tax shelter additional earnings from those in this age group with higher salaries. Either way, well done IRS! This one gets the SDB stamp of approval!

Can those aged 64 take advantage of the “super” catch up contributions? No. Why not? The government works in mysterious ways! 😂 In actuality, my best guess is that they don’t want too many high earners taking advantage of this for too long. In all honesty many soon-to-be retirees would benefit more from bulking up their cash savings anyway.

On top of all this, the IRS has increased the income range for those eligible for Roth IRA contributions. In 2024 solos with a MAGI (modified adjusted gross income) of $146,000 or less can contribute the full $7,000 (or $8,000 for those 50+) into their Roth IRA instead of a standard IRA.

In 2025, this income limit will be bumped up to a MAGI of $150,000! Solos making between $150,000 and $165,000 will be able to make reduced Roth IRA contributions. High earners making more than this might want to consider a backdoor 👀Roth IRA, but more on that in the future

The changes from 2024 to 2025 aren’t eye popping. That is… unless you are a SUPER SAVVY SOLO!!! If you are getting close to retirement age and aren’t where you want to be, take advantage of this. There’s no pressure to max this out for those who are looking heavy in the tax-deferred department. Don’t forget RMDs can be a bit of a tax burden later on in life. That said, never give up that company match no matter what!

Use this post as a basic guide to give you ideas on how to plan retirement savings for 2025. Check out the post on Retirement Vehicles to determine which route is the best for you, and set up the plan of attack!

Stay classy Solos! ✌️