Tax and Social Security changes for 2025

With the new year looming, it’s good to stay informed about some upcoming tax and social security changes that will come in 2025.

Of note, the IRS increased the amount people can contribute to their 401(k) plans in 2025 from $23,000 to $23,500. That also applies to 403(b), 457, and the federal government’s Thrift Savings Plan.

The $7,000 annual limit on IRA contributions remains unchanged.

Be sure to check with a financial adviser on details and exceptions, like the “catch-up” contributions – where those 50 and older can make extra contributions so they can save more as they near retirement age – you might be qualified to make if you’re closer to retirement. Or dive into more details on the IRS’ website here.

Starting with payments in January, Social Security beneficiaries will be getting a 2.5% cost of living adjustment.

The maximum taxable earnings for Social Security, also called the contribution and benefit base, is rising from the current $168,600 to $176,100. Workers (and employers) don’t have to pay 6.2% Social Security taxes on salary above that amount.

Make it your New Years’ resolution to check in with your financial advisor about any upcoming changes affecting you and your finances.