For those saving for retirement, the IRS recently announced an increase in the contribution limits for 401(k) accounts. Starting in 2025, individuals can now contribute up to $23,500 annually to their 401(k), up from $22,500 in 2024. This increase allows you to put more money away for retirement on a pre-tax basis, which can lower your taxable income and grow tax-deferred until retirement.
However, there is no change to the Individual Retirement Account (IRA) limit—it remains at $7,000 for 2025. While the IRA limit hasn’t changed, it’s still a great savings vehicle that offers either tax-deferred growth (for traditional IRAs) or tax-free growth (for Roth IRAs).
In addition to retirement savings, Health Savings Accounts (HSAs) are also seeing an increase. In 2025, the HSA contribution limit for individuals has been raised from $4,150 to $4,300, while families can now contribute up to $8,550, up from $8,300. HSAs offer unique tax advantages: contributions are tax-deductible, the money grows tax-free, and withdrawals for qualified medical expenses are tax-free.
If you have the cash flow, we recommend increasing your HSA contribution for next year. By maximizing your HSA, you can better prepare for future healthcare expenses while enjoying the immediate tax benefits.
