New 401(k) and IRA contribution limits announced

The Street

TheStreet’s Conway Gittens brings you the biggest news of the day, including what investors are watching and how your retirement planning might change in 2025.

Transcript

00:00I'm Conway Gaines reporting from the New York Stock Exchange.

00:02Here's what we're watching on the street today.

00:04Investors are bracing for what is

00:06likely to be a volatile week with a presidential election,

00:09a meeting of the Federal Reserve,

00:11several snapshots on the economy,

00:13and the continuance of earnings season.

00:16On the earnings front, Marriott is out with disappointing

00:18results on Monday.

00:19It missed sales and profit forecasts

00:22and dimmed full year estimates.

00:25In other headlines, the IRS has announced higher maximum

00:28savings limits for 401ks beginning in 2025.

00:32The maximum for annual tax-free contributions

00:35is going up to $23,500 from $23,000.

00:39The same goes for 403Bs and other employee-sponsored

00:43retirement accounts.

00:44Americans close to retirement are allotted

00:47an even bigger tax incentive.

00:49For those between the ages of 60 to 63,

00:52the so-called catch-up maximum is going up for the first time

00:56to $11,250 from $7,500.

01:00Meanwhile, more lower-to-moderate income workers

01:03may be eligible for the Retirement Savers Credit.

01:06The IRS measure allows for a dollar-to-dollar reduction

01:09on tax bills based on how much is set aside for retirement.

01:13A single person with an annual income of no more than $39,500

01:18will be eligible.

01:19That's up from $38,350 in 2024.

01:23For head of household, that number goes up to $59,250

01:28from $57,375 currently.

01:31For married couples filing jointly,

01:34that number goes up to $79,000 from $76,500.

01:39For those not saving for retirement

01:41through an employee-sponsored 401k

01:43but make deposits to an IRA or a Roth IRA,

01:47the annual contribution remains at $7,000.

01:51The IRS says all the changes are part of a 2025

01:55cost-of-living adjustment.

01:57That'll do it for your daily briefing

01:58from the New York Stock Exchange.

02:00I'm Conway Gittens with The Street.

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