2025 Retirement Savings Rules You Need to Know

The 2025 retirement savings rules may provide new opportunities for individuals to save more in their 401(k) plans. 

This is due to the passing of SECURE Act 2.0 which passed in 2022, which many provisions set to take effect in 2025.

Some of the new provisions may require employer implementation – and employers have discretion over whether to adopt certain options. 

This means you may need to inquire about your employer’s plans to ensure you can take full advantage of these changes.

Read on to learn more about the 2025 retirement savings rules.

 

Increased Catch-Up Contributions

The IRS announced an increase to 401(k) plan contribution limits for the upcoming year.

The 401(k) contribution limit has increased to $23,500 in 2025, up from $23,000 in 2024.

For workers 50 and above, there is no increase in catch-up contribution limits. 

The catch-up contribution limit for those 50 years and older remains $7,500 for a total contribution limit of $31,000.

 

Super Catch-Up 401(k) Contributions

The SECURE 2.0 introduced a new provision for individuals aged 60 to 63, allowing them to make higher catch-up contributions starting in 2025.

For this age group, the catch-up contribution limit increases to $11,250. 

As a result, eligible individuals aged 60 to 63 may contribute up to $34,750 in total to their 401(k) plan in 2025.

 

Automatic Enrollment in Workplace Retirement Plans

The 2025 retirement savings rules also include requiring employers to automatically enroll new employees at a savings rate between 3% and 10% of their salary.

In addition to the automatic enrollment, the contribution rate will now automatically increase by 1% each year until it reaches at least 10%.

The contribution rate will be capped at 15%.

Note – Employees retain the option to opt out of automatic enrollment.

 

Additional Allocations for Employer Matching Contributions

A 2024 provision of the Secure Act 2.0 relates to student loans and retirement. 

This provision of the Secure 2.0 Act allows employees to pay off student loans while saving for retirement through matching employer contributions. 

It went into effect on January 1, 2024, but many are still unaware of how it works.

In addition to this 2024 provision, the 2025 retirement savings rules pave the way for employer matching contributions to go to savings other than 401(k) plans.

According to reports, “The IRS has allowed workers at one company to use 401(k) matching contributions to pay for medical and student loan expenses, indicating the possibility that others might someday be able to do the same. The agency in an August ruling determined that a company, which it didn’t name, could allow its workers to allocate matching contribution to their 401(k), retiree health reimbursement arrangement (HRA), health savings account (HSA), or an educational assistance program used to pay off student loans.”¹

You can potentially have your employer match go towards student loans, a HAS (Health Savings Account), or an HRA (Health Reimbursement Arrangements) instead of your 401(k).

In about 5 years, this will be standard, but it is very new, and employers must request this ability from the IRS and then fill out the required paperwork.

If you are interested in this option, it is something you may want to discuss with your employer. 

Even if your employer doesn’t offer this option in 2025, you can go ahead and get the ball rolling. 

 

Lost 401(k) Plan Search Tool

Americans change jobs – often.

As a result, many Americans have several different 401(k) accounts.

According to reports, “There are some 24 million forgotten 401(k)s holding assets in excess of $1.3 trillion.”²

Generally, when 401(k) accounts sit too long, the accounts may eventually be deemed unclaimed property by the state.

[Related Read: The Danger of Forgetting to Roll Over Old 401(k)s]

You do not want to lose your hard-earned retirement savings!

We’re going to assume that was not your plan, but you may have mistakenly believed the 401(k) was rolled over when you changed jobs when it wasn’t.

It is up to you to keep track of your 401(k) savings.

But it has been hard to keep up with old 401(k) accounts – especially if you have changed jobs multiple times.

It’s about to get much easier!

The 2025 retirement savings rules include the Department of Labor adding a new search tool specifically for helping individuals locate lost 401(k) plans from former employers. 

This searchable database will make it easier to find old retirement accounts before they become property of the state.

Even if you don’t think you have any money unaccounted for, it’s still wise to take advantage of the new 401(k) plan search tool.

 

How to Maximize Retirement Savings in 2025

The 2025 retirement savings rules introduce several opportunities for Americans to enhance their retirement savings. 

Here are some strategies to consider:

• Take advantage of the increased catch-up contributions. Find ways to boost your contributions. Put any bonuses or Christmas gift money towards boosting contributions.
• Raise the percentage you are contributing. Every little bit adds up to more savings in the future.
• Carefully consider how you want to allocate your employer’s matching contributions. The goal should be to contribute as much as possible to your 401(k), but in some situations, such as contributing to a HAS, it may be a wise choice. 
• Use the lost 401(k) plan search tool just in case. It may prove to be well worth the little bit of time it takes.
• Speak to a financial advisor. You want to make sure you are following the rules and using them to your advantage. 

 

Have questions or concerns about your 401(k) performance? Book a complimentary 15-minute 401(k) strategy session with one of our advisors.

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Sources

1. https://www.investopedia.com/irs-ruling-could-open-up-401k-matches-student-loans-medical-payments-update-8738211
2. https://www.schwab.com/learn/story/tracking-down-lost-401k

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