Workers will be able to contribute up to $25,500 of their income to their 401(k) plans next year, the IRS announced Thursday.
That’s up $1,000 from this year’s limit. It is part of a broader set of inflation adjustments.
The limit on Individual Retirement Accounts remains at $7,500 and the IRA catch-up contribution for those age 50 and older will stick at $1,100.
People were interested in these podcasts
The 401(k) catch-up will rise $500, meaning those 50 and older can contribute up to $34,000 next year. Those ages 60 to 63 have an even higher-catch-up, bringing their total possible contributions to more than $37,000.
Income limits for participating in IRAs were also adjusted upward.
“With the new adjustment in place now, the IRS is giving taxpayers and employers the information needed to make retirement planning decisions for the year ahead,” said IRS Chief Executive Officer Frank J. Bisignano.
Contact the author
Please read our comment policy before commenting.