The 401(k) contribution limit for employees in 2025 has increased to $23,500, up from $23,000 in 2024. The employer contribution limit also rises to $46,500, bringing the combined employee and employer 401(k) contribution limit to $70,000 for 2025.

Don’t underestimate the power of employer 401(k) contributions, especially as you advance in your career. As you gain seniority, you might find that employer profit-sharing or matching contributions become more significant. In strong years, some companies increase their profit-sharing contributions to reward employees. The year I left Credit Suisse, for instance, I received a $22,000 match/profit-sharing contribution on top of my maximum 401(k) contribution.

For employees ages 50 and older, the catch-up contribution limit remains at $7,500, unchanged from 2024. However, starting in 2025, employees aged 60 to 63 will benefit from an increased catch-up contribution limit of $11,250, rather than the standard $7,500, providing additional support for those approaching retirement.

Contributing

Keep reading this article on Financial Samurai.

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