Question 1

What is the 401(k) contribution limit for 2025?

Accepted Answer

The 2025 401(k) elective deferral limit is $23,500 for employees under age 50. Workers aged 50 and older can contribute up to $31,000 including the $7,500 catch-up contribution. The total combined limit including employer contributions is $70,000, or $77,500 for those 50 and older.

Question 2

Did 401(k) limits go up in 2025?

Accepted Answer

Yes. The employee contribution limit increased from $23,000 in 2024 to $23,500 in 2025. The catch-up contribution limit stayed at $7,500. The total combined limit rose from $69,000 to $70,000.

Question 3

Does a 401(k) reduce taxable income?

Accepted Answer

Yes. Traditional 401(k) contributions are made pre-tax and directly reduce your taxable income for the year. If you contribute $23,500, your taxable income is reduced by that amount. Roth 401(k) contributions are made after-tax and do not reduce current taxable income, but qualified withdrawals in retirement are tax-free.

401(k) Contribution Limits 2025: How Much Can You Contribute?