Social Security:
- Cost-of-Living Adjustment (COLA) for 2025 will be 2.5%.
Retirement Accounts:
- Contribution limits for 401(k)s, 403(b)s, 457 plans, and the federal government’s Thrift Savings Plan have increased to $23,500 for 2025. The catch-up contribution for those aged 50 and above remains $7,500.
- Starting in 2025, under the SECURE Act 2.0, workers aged 60 to 63 can increase their catch-up contributions for 401(k), 403(b), and 457(b) plans from $7,500 to $11,250 annually—a valuable option for those nearing retirement. This applies to participants who turn 60, 61, 62, or 63 within the tax year.
- IRA contribution limits remain at $7,000, with a $1,000 catch-up for those 50 and older.
- SIMPLE retirement account limits are rising to $16,500, with a $3,500 catch-up contribution for those 50+, and $5,250 for those aged 60-63.
Health Savings Accounts (HSAs):
- The IRS has announced 2025 figures for HSAs. The minimum deductible for qualifying High-Deductible Health Plans (HDHPs) has increased to $1,650 for individuals (a $50 increase) and $3,300 for families (a $100 increase), although plans may choose to set higher deductibles.
- The maximum HSA contribution has risen to $4,300 for individuals (a $150 increase) and $8,550 for families (a $250 increase), with an additional $1,000 catch-up contribution available for those 55 and older. Maximum out-of-pocket expenses, excluding premiums, are now set at $8,300 for individuals (a $250 increase) and $16,600 for families (a $500 increase).
2025 Federal Income Tax Brackets and Standard Deductions: Tax brackets and rates have been updated for 2025. Here’s a summary:
The standard deductions for 2025 are as follows:
- Single and Married Filing Separately: $15,000
- Married Filing Jointly: $30,000
- Head of Household: $22,500
- Additionally, the Annual Gift Exclusion will increase to $19,000 per person
IMPORTANT DISCLOSURE INFORMATION
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