New Contribution Limits for Retirement Plans, Health & Dependent Savings Accounts, and Estate & Gift Tax for 2025

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 Meaghan Faerber By: Meaghan Faerber
New Contribution Limits for Retirement Plans, Health & Dependent Savings Accounts, and Estate & Gift Tax for 2025
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With a new year comes many new changes – putting up a new calendar, making New Year’s resolutions, AND new contribution and gifting limits imposed by the IRS. 

The IRS reviews the contribution limits and income phase-out ranges for retirement plans, health and dependent care savings accounts, and gift tax exclusions annually, and makes modifications if needed, mainly for inflation. 

It’s wise to check these limits each year before making contribution elections to your employer provided benefits plans, contributions to various accounts or gifts throughout the year. 

Beginning January 1, 2025, the contribution limits to many retirement plans were increased. Maxing out your employer provided retirement plan is one of the best ways to save for retirement because it often times allows you to receive “free money” with employer matching, along with an immediate tax benefit by reducing your taxable income. 

Below are several of these changes as they compare to 2024: 

Retirement Plan Contribution Limits 

Plan Type 

2024 

2025 

Change 

Maximum employee elective deferral or pretax contribution limit for 401(k), 403(b) and most 457 plans – younger than age 50 

$23,000 

$23,500 

$500 

Maximum employee elective deferral or pretax contribution limit for 401(k), 403(b) and most 457 plans – age 50 and older 

$30,500 

$31,000 

$500 

Maximum employee elective deferral or pretax contribution limit for 401(k), 403(b) and most 457 plans – age 60-63 

- 

$34,750 

$11,250 

Traditional & Roth IRA contribution limit - younger than age 50 

$7,000 

$7,000 

No change 

Traditional & Roth IRA contribution limit - age 50 & older 

$8,000 

$8,000 

No change 

SIMPLE Plan contribution limit - younger than age 50 

$16,000 

$16,500 

$500 

SIMPLE Plan contribution limit - age 50 & older 

$19,500 

$20,000 

$500 

Defined contribution plan limit (employee + employer) 

$69,000 

$70,000 

$1,000 

Many people take advantage of their employer provided retirement plans, but some also want to save more than the plan allows. One way to do this is by making contributions to a Traditional or Roth IRA. 

You are allowed a tax deduction for contributions made to a Traditional IRA if your income is below a certain threshold. If your income is too high for the deductible contribution, you can still make the Traditional IRA contribution, but no tax benefit is received for the initial investment. 

Similarly, you are only allowed to contribute directly to a Roth IRA if your income is below a certain threshold. To see if you are eligible to make these contributions in 2025, here are the new income phase-out ranges: 

Income Phase-Out Ranges for IRAs 

Contribution Types 

2024 

2025 

Change 

Traditional IRA deductible contribution - Single (covered by workplace retirement plan) 

$77,000 - $87,000 

$79,000 - $89,000 

$2,000 

Traditional IRA deductible contribution - Married Filing Joint (covered by workplace retirement plan) 

$123,000 - $143,000 

$126,000 - $146,000 

$3,000 

Traditional IRA deductible contribution - not covered by workplace retirement plan 

$230,000 - $240,000 

$236,000 - $246,000 

$6,000 

Roth IRA contribution – Single 

$146,000 - $161,000 

$150,000 - $165,000 

$4,000 

Roth IRA contribution - Married Filing Joint 

$230,000 - $240,000 

$236,000 - $246,000

$6,000 

In recent years, the IRS made several changes to the contribution limits for Health and Dependent Care Savings & Spending Accounts. For 2025, those accounts saw little changes: 

Health and Dependent Care Savings & Spending Accounts 

Heath Savings Accounts (HSAs) 

2024 

2025 

Change 

HSA Contribution Limit (Employer + Employee) 

Self-only:

$4,150 

Family:

$7,750 

Self-only:

$4,300 

Family:

$8,550 

Self-only:

$150 
Family: 

$800 

HSA Catch-Up Contribution Limit (Age 55+) 

$1,000 

$1,000 

No change 

 

Heathcare Flexible Spending Accounts (FSAs) 

2024 

2025 

Change 

Maximum salary deferral 

$3,200 

$3,300 

$100 

Maximum rollover amount 

$640 

$660 

$20 

 

Dependent Care Flexible Spending Accounts

2024 

2025 

Change 

Maximum salary deferral (single and married filing jointly)

$5,000 

$5,000 

$0 

Maximum salary deferral (married filing separately)

$2,500

$2,500 

$0 

The final change we want to point out is the increased estate and gift tax limits for 2025. The IRS typically increases this limit each year to account for inflation so 2025 limits saw a notable bump: 

Estate and Gift Tax Limits 

 

2024 

2025 

Change 

Annual gift tax exclusion 

$18,000 

$19,000 

$1,000 

Gift tax and estate tax exclusion amount 

$13,610,000 

$13,990,000 

$380,000 

Next Steps  

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Meaghan Faerber joined the Plancorp team in October 2020 after spending the first 10 years of her career in public accounting. After graduating from the University of Missouri, Meaghan began her career at PricewaterhouseCoopers, LLP, where she provided income tax services to high net worth families and corporate executives. She continued working with ultra-high net worth individuals, other small business owners, and family office clients as a tax manager at Burds & Kuntz, PC where she expanded her knowledge and expertise in tax planning & compliance, philanthropic endeavors, and family office services. Meaghan brings her tax expertise with her to the Plancorp Family Office practice and is dedicated to helping clients with not only their tax planning needs, but in all aspects of their financial lives. Meaghan lives in Washington, MO with her husband and two young children. She and her husband both grew up in Washington, where they met in high school, and were excited to move back to raise their family in the town they love. Outside of work, Meaghan enjoys exercising, spending time with her family & friends, cooking with her husband, and watching her children grow and experience new things. More »

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