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For plans like a 401(k), 403(b), Thrift Savings Plan, some 457 plans and Simple IRAs and 401(k) plans, the total contribution limit for participants age 60 to 63 in 2025 is $34,750.
“Continue contributing to a Roth or traditional IRA, but remember the contribution limits are relatively low compared to a 401(k),” Meyer said. (The maximum contribution is $7,000 for 2024).
For the 2025 tax year, the IRS is increasing the annual contribution limit for 401(k) plans by $500 from the current limit of $23,000 in 2024 to $23,500 in 2025.
Can be converted to a Roth IRA, typically for backdoor Roth IRA contributions. Taxes need to be paid during the year of the conversion. Also, the non-basis portion can be rolled over into a 401(k), if allowed by the 401(k) plan. Changing Institutions Can roll over to another employer's 401(k) plan or to a rollover IRA at an independent institution.
Another key advantage of a 401(k) is the high contribution limit — $23,000 vs. $7,000 for an IRA. Key Differences Between IRAs and 401(k) Accounts Here is an overview to help you quickly compare ...
In contrast, traditional IRAs and 401(k)s offer a tax break in the year you contribute — your contributions are tax-deductible — but you pay income tax on the money, both your contributions ...