2025 Retirement Contribution Limits
Inflation & Retirement Stress
Skyrocketing inflation, weak job sectors, and rising living costs are eroding many Americans’ retirement savings. These economic pressures follow pandemic-era disruptions, making financial stability harder to achieve.
Limited Access to Retirement Plans
A 2022 AARP report found over 50% of Americans aged 18–64 lack employer-based retirement plans. Notably, one-third of workers at large companies also lack access.
Introducing SECURE 2.0
By late 2022, Congress passed the SECURE 2.0 Act (an expanded version of SECURE Act), with over 90 provisions aiming to make retirement benefits more accessible and affordable.
Delayed RMD Deadlines
The Act raises required minimum distribution (RMD) age to 73 in 2023 and 75 by 2033. It also lowers withdrawal penalty from 50% to 25%.
Part-Time Employee Coverage
Starting December 2024, employers must offer retirement plans to part-time employees with 500+ hours annually over two years, expanding access significantly.
Student Loan Matching
From 2025, 401(k), 403(b), or SIMPLE IRA plans can match employee student loan payments, helping borrowers save without separate contributions.
New Emergency Savings Option
The Act introduces pension-linked emergency savings accounts. Employers can contribute up to 3% of salary ($2,500/year max); employees may withdraw four times yearly tax-free.
Required Auto‑Enrollment
Beginning in 2023, new employer plans must auto-enroll employees with contributions starting at 3%, rising 1% annually to reach 10–15%. Employees may opt out anytime.
Taking the Next Step
SECURE 2.0 gradually rolls out through 2025 with the aim of increasing benefit access and savings opportunities for employees nationwide.
To learn more about retirement, plan options, and need-to-know terms, speak with an expert or your employer today. New to all this jargon? Check out this easy to read and extensive list of terms!
The above content is purely informational and is not comprehensive.
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Sources Cited:
These Are the Major 401(k) Retirement Changes For 2023 (forbes.com)
What are the big changes coming to 401k in 2023? – AS USA
Smart Money: Retirement Changes You May Have Missed – cleveland.com
Payroll Deduction Retirement Programs Build Economic Security – AARP Fact Sheet
Congress Passes Sweeping Overhaul of Retirement System – WSJ
These Are The Biggest Changes To Retirement Plans Under SECURE Act 2.0 | Nasdaq
10 of the biggest changes to retirement accounts due to new 401(k) and IRA rules (msn.com)