Being over 50 isn’t all fun and fabulous, but it has its benefits, so be sure to take advantage of every penny when it comes to tax time. And this year, 2025 has brought a few positive changes to the tax code for us. Thanks IRS!
The Scoop on 2025 Retirement Contributions
You’re cruising into your golden years, and Uncle Sam’s actually giving you a break. Well, it’s actually meant as a chance to catch up as you get closer to retirement.
For 2025, here’s the key info:
- 401(k) and similar plans: You can now stash away $23,500
- Bonus for the 50+ crew: An extra $7,500 (because we’ve earned it!)
- Super special bonus for 60-63 year olds: Up to $11,250 more
That means folks 50-60 can sock away up to $31,000. Not too shabby, right?
IRAs: Added 50+ Bonus
Traditional and Roth IRAs are holding steady at a $7,000 contribution limit for 2025, but if you’re 50+, you can add another $1,000. (Consider it a mid-life financial high-five.)
A Tax-Saving Extra for 401K and IRA
Also consider that when you contribute to a traditional 401(k) or IRA, your taxable income shrinks.
Example time:
- Salary: $75,000
- Contribute 6% ($4,500)
- Taxable income drops to $70,500
- Tax savings: Around $990
*Pro tip*: Roth accounts work differently. No upfront tax break, but tax-free withdrawals later.
Go State by State
Be sure to check with your state’s tax agency <<https://taxadmin.org/fta-members/>> for any state-wide benefits for older adults.
The Fine Print (Because There’s Always Fine Print)
Income limits alert! Depending on your earnings, those tax deductions and contribution abilities might change. The IRS loves its complicated rules.
Quick takeaways:
- Contribute what you can
- Take advantage of catch-up options
- Consider both traditional and Roth accounts
- Don’t stress—every little bit helps
Remember, retirement planning isn’t about perfection. It’s about progress. (And maybe a few extra vacations.)
Thoughts? Questions? Drop a comment below and let’s chat! 💰🌴
*I’m not a tax or financial professional, just an Old Maid looking to save for retirement wherever possible. I’m sharing this information with you as a friend, but please do your own research and work with a financial advisor or tax professional to ensure the most accurate accounting.
