Contribution Limits: What You Can and Can’t Contribute

Retirement plans come in all shapes and sizes, from 401(k)s and IRAs to SEP IRAs and Solo 401(k)s. Each of these has different contribution limits, and these limits can change from year to year based on inflation adjustments. So, let’s dive into some of the most common retirement plan options and their 2024 and 2025 limits (note: the IRS usually updates these limits in the fall, so always double-check for any changes). Some of these contributions come with income limits, so double-check with your CPA before making contributions.

1. 401(k) Plans

For 2024, the contribution limit for a 401(k) plan is $23,000 for employees under the age of 50. If you’re 50 or older, you get a “catch-up” contribution of $7,500, bringing your total allowable contribution to $30,500.For 2025, the contribution limit for employees under 50 increases to $23,500.The passage of SECURE Act 2.0 in 2022 has changed catch-up contributions in 2025. Workers aged 50 to 59 can still make the $7,500 catch-up contribution allowed in 2024. However, individuals aged 60 to 63 are eligible for an $11,250 catch-up contribution, providing an additional $3,750 in potential 401(k) contributions.These limits apply to traditional 401(k)s as well as Roth 401(k)s. If your employer offers a match, remember that the combined employee and employer contribution limit for 2024 is $66,000 (or $73,500 if you’re 50 or older). For 2025, the total contribution limit for 401(k)s rises to $66,000 (or $73,500 for those 50+).

2. IRA (Traditional and Roth)

For IRAs, the contribution limit is significantly lower, yet still valuable. For 2024, the limit is $7,000 for those under 50, and $8,000 for individuals aged 50 and older.

For 2025, the contribution limits do not change.

This limit applies to the combined total for traditional and Roth IRAs—you can’t contribute the maximum to both.

3. SEP IRA

If you’re self-employed or a small business owner, you have access to even higher contribution limits through plans like the SEP IRA.

For 2024, SEP IRA contributions can be up to 25% of your compensation or $69,000, whichever is less. The SEP-IRA contribution limit increased to $70,000 in 2025.

SEP IRAs do not have catch-up contributions.

4. Health Savings Accounts (HSAs)

The Health Savings Account (HSA) is a frequently overlooked yet powerful retirement savings option. HSAs enable you to save for medical expenses with triple tax advantages: contributions are tax-deductible, the assets grow tax-deferred, and withdrawals for qualified medical expenses are tax-free. You must have a high-deductible health plan (HDHP) to contribute to an HSA.

For 2024, the contribution limit for an HSA is:

• $4,150 for individuals with self-only coverage under a high-deductible health plan (HDHP).

• $8,300 for families with family coverage under a high-deductible health plan.

For 2025, the contribution limits increase to:

• $4,300 for individuals with self-only coverage.

• $8,550 for family coverage.

If you’re 55 or older (not 50, like with retirement plans), you can make a catch-up contribution of $1,000 for both years. If both spouses are at least 55, you can make a catch-up contribution for each spouse, but it can only be done in separate HSAs.

Deadlines: Don’t Miss Your Opportunity

Understanding the contribution limits is crucial, but knowing the contribution deadlines is just as important. Missing a deadline can mean missing opportunities to maximize your tax-advantaged retirement savings.

1. 401(k) Contributions

For a 401(k), the deadline is generally the last day of the calendar year — December 31st. Keep in mind that employer matching contributions don’t necessarily need to be made by the end of the calendar year, but it’s best to check with your plan administrator to avoid surprises.

2. IRA Contributions

For IRAs, the deadline is typically April 15th of the following year (Tax Day). So, if you want to make a 2024 contribution, you have until April 15, 2025, to do so.

3. SEP IRA Contributions

For SEP IRAs, the deadline is tied to your business’s tax return deadline, including extensions. If you file your taxes by the usual deadline of April 15, your SEP contribution must be made by that date as well. However, if you file for an extension, you have until October 15 to make SEP contributions.

4. HSA Contributions

The deadline for making contributions to your HSA for a given year is the tax filing deadline — typically April 15 of the following year. So, for 2024, you can contribute to your HSA until April 15, 2025. If you file for an extension, you have until October 15, 2025.

It’s easy to put retirement savings on the back burner when competing financial priorities exist, but one of the most important factors in investing is giving yourself as much time as possible for your investments to grow. If you have any questions about retirement contributions, please don’t hesitate to contact us!