As part of your planning, now is the time to review the contributions to your retirement accounts in 2025. Recent cost of living calculations mean much higher contribution limits for this year. The higher income phaseouts for eligibility will make many more taxpayers eligible for fully deductible contributions. So, plan now to take full advantage of this tax benefit. Here are the annual contribution limits for the more popular programs:

Planning your retirement contributions

1. Identify the type(s) of retirement savings plans you currently use.
2. Note the annual savings limits of the plan to adjust your savings to take full advantage of the annual contributions. Remember, a missed year is a missed opportunity that does not return.
3. If you are 50 or older, add the catch-up amount to your potential savings total.
4. NEW this year: There is an increase in the 401(k), 401(b), and 457 catch-up contributions you may use if you are 60 to 63.
5. Take note of the income limits within each plan type.
   1. For traditional IRAs, if your income is below the noted threshold, your taxable income is reduced by your contributions. The deductibility of your contributions is also limited if your spouse has access to a plan.
   2. In the case of Roth IRAs, the income limits restrict who can participate in the plan.

Other ideas for retirement in 2025

If you have not already done so, also consider:

• Setting up new accounts for a spouse or dependent(s)
• Using this time as a chance to review the status of your retirement plan, including beneficiaries
• Reviewing contributions to other tax-advantaged plans like Flexible Spending Accounts and Health Savings Accounts