(NewsNation) — The Internal Revenue Service announced the amount you can contribute to your 401(k) plans this year will increase to $23,500.

What changes were made to 401(k) contributions for 2025?

The annual contribution limit for those who participate in a 401(k), 403(b), governmental 457 plan or the federal government’s Thrift Savings Plan was increased to $23,500 — up from $23,000 in 2024.

The limit on IRA annual contributions, however, will remain at $7,000. The catch-up contribution limit for those 50 and older was amended under the SECURE 2.0 Act of 2022 to include annual cost-of-living adjustments, but it stayed at $1,000 for 2025, according to the IRS.

	Pre-tax and Roth employee contributions	Employee and employer contributions	Catch-up contributions
401(k) contribution limit for 2024	$23,000	$69,000	$7,500
401(k) contribution limit for 2025	$23,500	$70,000	$7,500 (50 to 59 or 64+), $11,250 (60 to 63, if allowed)

The catch-up contribution limit for those 50 and older who participate in one of these programs is $7,500 for 2025. This means that these individuals can contribute up to $31,000 each year.

If you’re an employee who is 60 to 63 years old and you participate in one of these plans, the catch-up contribution limit is $11,250 instead of the $7,500.

If you have 401(k) plans at multiple employers

If you have multiple 401(k) plans through different employers, you will still be limited to the total employee contribution for the year.

So, if you have three 401(k) plans, you will need to choose how to split up your maximum contribution of $23,500 between all three plans, according to Fidelity Investments.

Note: The limits don’t affect the amount you can put into your IRA. You can save the allowable amount each year in your 401(k) and IRA.

Limits for after-tax 401(k) contributions

If you hit the maximum you can save in your 401(k) for the year, you could save more through after-tax contributions. This means you would only pay taxes on the growth of these contributions when you withdraw your money in retirement.

You could also contribute up to the total employee and employer contribution limit if your plan allows and your existing contributions don’t exceed the limit.

However, not all 401(k) plans allow for after-tax contributions. If your plan doesn’t, or you want to put in more than the after-tax contribution limit, you could use an IRA.

What if I put too much in my 401(k)?

If you put more into your 401(k) plan than is allowed, any excess will be seen as your income in the year the contributions are made. This means your excess contributions will be taxed again once you withdraw your funds.

If you have any excess funds or earnings, you can report them on Form 1099-R when you file your taxes. Switching jobs or having more than one 401(k) plan could make it easier to accidentally save too much.