Know the Maximum 2025 Contribution Limits for Retirement Plans and Health Savings Accounts 

Contribution Limits for 401(k), 403(b), and most 457 plans

$23,500 (under age 50)

$31,000 (ages 50-59 and 64+; includes $7,500 catch-up contribution) 

$34,750 (ages 60-63; includes $11,250 catch-up contribution)

Employers can make a matching contribution or profit sharing contribution up to 25% of compensation up to a maximum of $70,000

Total employer/employee contributions cannot exceed $70,000
$77,500 for ages 50-59 and 64+
$81,250 for ages 60-63 

Contribution Limits for SEP and SIMPLE IRAs

SEP Employee Contributions: N/A

SEP Employer Contributions: Up to 25% of compensation up to a maximum of $70,000

SIMPLE Employee Contributions: Up to $16,500 in salary deferrals; $20,000 for ages 50-59 and 64+; $21,750 for ages 60-63

SIMPLE Employer Contributions: Employers can either make a matching contribution of 1-3% of an employee’s salary or make a non-elective contribution of 2% of an employee’s compensation for all eligible employees whether or not they make salary reduction contributions.

Contribution Limits for Health Savings Accounts (HSAs) 

Employee and Employer Maximum Contributions: $4,300 for individuals; $8,550 for families. People 55 and older can contribute an additional $1,000. To qualify for an HSA, your health insurance policy must have a deductible of at least $1,650 for individuals or $3,300 for family coverage. 

Know the Maximum 2025 Contribution Limits for IRAs 

IRA Contribution Limits (Traditional and Roth)

$7,000 (under age 50)

$8,000 (age 50 and older; includes $1,000 catch-up contribution)

A "Backdoor Roth" Allows High Earners to Qualify for a Roth IRA

If your income level exceeds the allowable amount to qualify for a Roth IRA, you can use the backdoor Roth strategy if a Roth IRA is appropriate for you. You would make a nondeductible contribution for the maximum allowable amount into a Traditional IRA ($7,000 if you’re younger than 50, $8,000 if you’re 50 or older). Then you would convert your Traditional IRA into a Roth IRA. This is generally a taxable event in which you pay ordinary income tax on the amount you convert into the Roth IRA, but all earnings and growth in the Roth IRA after the conversion will be tax-free after they’ve been in the account for five years. In addition, Roth IRA owners aren’t subject to required minimum distributions (RMDs), but their beneficiaries who inherit the Roth IRA will be required to take RMDs.

High-income earners who have traditional IRAs, SEP IRAs, and/or SIMPLE IRAs from a previous employer can also convert these accounts to Roth IRAs. You’ll want to discuss this with your tax professional to see if you want to spread the conversion out over multiple years to avoid a large tax liability in a single year, especially if the conversion could bump you into a higher tax bracket. 

A "Mega Backdoor Roth" Allows High Earners to Maximize Retirement Plan Contributions

Another little-known strategy allows high earners to use after-tax contributions to a 401(k) to fund a Roth IRA. It’s called a mega backdoor Roth because the dollar amounts involved are typically large. 

Example: A 50-Year Old Employee Contributes the Maximum to a 401(k)

How can this individual reach the $77,500 limit for 2025 for employees 50 or older?

The employee can make after-tax contributions to contribute an additional $31,000

Why would someone want to do this?

High-income individuals who otherwise aren't eligible for a Roth IRA can rollover the after-tax contributions they make in a 401(k) into a Roth IRA.

How does it work?

Call your 401(k) provider and ask if your plan allows after-tax contributions. If it does, ask if the plan permits you to rollover your after-tax contributions into a Roth IRA (i.e., in-service withdrawals or in-plan conversions). More than 70% of 401(k) plans allow in-service withdrawals,¹ so it’s likely your plan offers this feature.