How much you can contribute to your 401(k), IRA, HSA, and 529 in 2025

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New year, new contribution limits for your accounts.

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Each new year brings with it changes to tax laws, including those governing how much you can set aside for retirement, college, and medical expenses and still take a full deduction on your tax return.

And 2025 is no exception. The contribution limits for the most common tax-advantaged savings accounts have been revised to adjust for inflation, and it pays to know what the changes are.

There are limits on how much you can save in certain accounts, even though many workers never contribute the maximum amounts to an individual retirement account (IRA) or 401(k) plan. These restrictions may seem counterintuitive, given the goal of encouraging retirement savings. Why not simply let everyone save as much as they can?

Think of contribution limits as a sort of compromise. Saving is a challenge for most of us. The Internal Revenue Service (IRS) makes the job easier with tax-deferred and tax-deductible accounts. But realistically, Uncle Sam doesn’t want you shielding too much of your income from taxation—especially earners with higher incomes. Essentially, that’s why there are limits.

It’s also why there are well-defined rules for when and why you must pay taxes on withdrawals from certain accounts, including what the penalties might be if you break them. Knowing these parameters is another key aspect of understanding contribution limits rules.

Contribution limits, catch-up provisions for savers age 50 and older, and tax implication vary with each type of retirement or savings account.

The contribution limits for 401(k) and 403(b) accounts are substantial. In 2025, employees can contribute up to $23,500 tax deferred to these plans. Those age 50 and older can contribute an additional $7,500, bringing their total limit to $31,000. For employees ages 60 to 63, provisions in the SECURE 2.0 Act increase the catch-up contribution to $11,250, raising the limit to $34,750.

Those who work for companies that offer a match on employee contributions can push these limits even higher. For 2025, the total contribution limit (employer plus employee) for 401(k) plans is $70,000, or 100% of the employee’s pay, whichever is less.

If your salary is $350,000 or more, there are restrictions on contributions to retirement accounts, although you can still contribute the full catch-up amount if you are 50 or older.

All contributions to traditional 401(k) and 403(b) plans are tax deferred, which means you’ll owe ordinary income tax on withdrawals you take in retirement (or early withdrawals).

Individual retirement account (IRA) contribution limits are much lower than 401(k) limits. For 2025, the maximum contribution to traditional or Roth IRAs remains unchanged at $7,000, with a $1,000 catch-up option if you are 50 or older.

These contribution limits apply even if you have a traditional and a Roth IRA. You can split the maximum contribution between the two accounts. For example, if you contribute $2,000 to your traditional IRA, you can contribute only $5,000 to your Roth IRA, for a total of $7,000.

Understanding income limits is also key. As long as neither you nor your spouse has a workplace retirement savings account such as a 401(k), you can contribute the maximum to a traditional IRA no matter how much money you earn. But there are income restrictions governing Roth IRA contributions.

In 2025, if you are married and file a joint tax return, you can’t fund a Roth IRA if your modified adjusted gross income (MAGI) is $246,000 or more. And if you earn $236,000 to $246,000 jointly, you can contribute to a Roth, but the amount is reduced. For single taxpayers, the income phaseout begins at $150,000. If you earn $165,000 or more, you can’t fund a Roth IRA.

It’s possible to contribute significantly more to a Roth IRA by converting funds from a traditional IRA, 401(k), or 403(b) through a “backdoor” Roth IRA or Roth conversion. There are no contribution limits on Roth conversions, although it’s important to remember that any funds transferred are taxed before they land in the Roth account.

All contributions to traditional IRAs are tax deferred, which means you’ll owe taxes on withdrawals you take in retirement. Contributions to Roth IRAs are taxed before they are invested, and withdrawals are tax free.

A simplified employee pension (SEP) plan differs from most retirement accounts in that it’s designed for small businesses and self-employed individuals. The SEP-IRA is relatively easy to set up, the costs are low, and depending on your income level, the contribution limit can be substantially higher than that of a traditional IRA.

Employees don’t contribute to a SEP-IRA; instead, the employer funds it. If you’re self-employed, you act as your own employer. The account is in your name, but the employer (or you, if self-employed) determines the annual contribution amount. Contributions are tax deductible and vest immediately.

In 2025, an employer can contribute up to $70,000, or 25% of an employee’s total compensation, whichever is less. Some factors affect eligibility, such as how long you have worked for the company and how much you earn.

To be eligible for a health savings account (HSA), you must have a high-deductible health plan (HDHP). Withdrawals must be used for qualified medical expenses, but the tax benefits are among the best of any tax-advantaged account.

To qualify as a high-deductible health plan, the annual deductible must be at least $1,650 for individuals and $3,300 for families. Your health plan’s out-of-pocket expenses can’t exceed $8,300 if you have sole coverage, or $16,600 if you cover your family in 2025.

HSAs offer a triple tax benefit. Contributions are tax deductible; earnings on investments grow tax free; and withdrawals for qualified medical expenses are also tax free. But withdrawals for nonqualified expenses are subject to income tax, and if you’re 64 or younger, a 20% penalty also applies to nonqualified withdrawals.

A 529 plan is a tax-advantaged account designed to help families save for education expenses. Earnings grow tax free, and withdrawals for qualified education expenses aren’t subject to additional taxes.

The IRS doesn’t impose annual contribution limits for 529 plans, but states set their own rules for total contributions and maximum account balances. Under 2025 gift tax rules, individuals can contribute up to $19,000 for each beneficiary without filing a gift tax return, or up to $38,000 jointly as a married couple. To maintain the tax benefits, funds must be used for qualified education expenses, so it’s helpful to consider potential education costs when deciding how much to contribute.

If you contribute more than $19,000 a year, you’ll have to file form 709 with the IRS noting the excess gift amount, which then counts toward your lifetime gift tax exclusion.

The five-year election. If you wish to make a larger, one-time contribution to a 529 account (up to a maximum of $95,000 in 2025), it can be done as a five-year election. The amount is a one-time deposit, but for gift tax reporting, it’s treated as if it were spread over five years.

Although the federal government doesn’t allow you to take a tax deduction for 529 contributions, some states do. Check the rules that apply in your state to see if you qualify.

Saving for retirement, medical expenses, and your child’s education can feel overwhelming, but tax-advantaged plans such as 401(k)s, 403(b)s, IRAs, Roth IRAs, SEPs, HSAs, and 529s are designed to help you build financial security. These plans offer significant tax benefits, but annual contribution and income limits ensure they remain accessible and equitable for a broad range of savers.

Understanding these limits is essential to making the most of these accounts. By planning strategically and contributing as much as you can within the limits, you can take meaningful steps toward achieving your financial goals.