Retirement planning.

Retirement contribution limits are the maximum annual contributions to retirement accounts, subject to inflation adjustments.

How do the increases impact you based on your age?

2025 401(k) Contribution Changes

• 2025 - $23,500
  • Individuals age 50 and up can contribute an additional $7,500 ($31,000 total)
  • Individuals age 60-63 can contribute an additional $11,250 ($34,750 total)
• 2024 - $23,000; individuals age 50 and up can contribute an additional $7,500 ($30,500 total)

2025 Traditional IRA/Roth IRA Contribution Changes

• 2025 - $7,000; individuals age 50 and up can contribute an additional $1,000 ($8,000 total)
• 2024 - $7,000; individuals age 50 and up can contribute an additional $1,000 ($8,000 total)

2025 Simple IRA Contribution Changes

• 2025 - $16,500; individuals age 50 and up can contribute an additional $3,500 ($20,000 total)
• 2024 - $16,000; individuals age 50 and up can contribute an additional $3,500 ($19,500 total)

2025 Indiana 529 Contribution and State Tax Credit Changes

• 2025 - Contributions by Indiana taxpayers qualify for a 20% tax credit with a maximum credit of $1,500 for a $7,500 contribution
• 2024 - Contributions by Indiana taxpayers qualify for a 20% tax credit with a maximum credit of $1,500 for a $7,500 contribution

Bottom Line: Contribution limits increased in 2025, except for the Traditional/Roth IRA and Indiana 529 savings plan.

The answer depends on a handful of things unique you, such as your:

• Current age
• Retirement age
• Expected living expenses
• Expected retirement income
• Desired retirement lifestyle

A common rule of thumb is to save at least 10-15% of your pre-tax income.

This can be a combination of your own contributions to a retirement account and contributions made by your employer.

It's also important to start saving for retirement as early as possible. This gives your investments more time to grow and take advantage of compounding interest.

Bottom Line: Ultimately, the amount you need to save for retirement will depend on your unique circumstances and financial goals.

A Roth IRA is a type of individual retirement account that allows you to contribute after-tax dollars to the account, and then withdraw the money tax-free in retirement.

Unlike a traditional IRA or 401(k), contributions to a Roth IRA are not tax-deductible.

Whether or not you should have a Roth IRA depends on your individual financial situation and goals.

Generally, a Roth IRA can be a good choice if you expect your tax rate to be higher in retirement than it is now, or if you want to have tax-free income in retirement.

It can also be a good option if you want flexibility in withdrawing your retirement funds, since there are no required minimum distributions (RMDs) with a Roth IRA.

However, there are income limits for contributing to a Roth IRA, so it may not be an option for everyone.

Bottom Line: We recommend seeking advice from a financial advisor to assess if a Roth IRA aligns with your financial goals and to assist in understanding the contribution limits and regulations linked to this type of account.

There are several ways to minimize taxes in retirement. Here are a handful of strategies to consider:

1. Contribute to a Roth IRA or Roth 401(k): Roth contributions are made with after-tax dollars, so withdrawals in retirement are tax-free.
2. Delay Social Security: Delaying Social Security benefits until age 70 can increase your benefit amount and reduce your taxable income in the meantime.
3. Use tax-efficient investment strategies: Consider investing in tax-efficient investments like index funds, which have lower turnover rates and generate less taxable income.
4. Manage withdrawals from retirement accounts: Strategically plan retirement account withdrawals to minimize taxes by prioritizing taxable account withdrawals before tapping into tax-deferred accounts until required minimum distributions (RMDs) commence.
5. Consider tax diversification: Diversifying retirement accounts can offer more flexibility and control over taxable income in retirement.

Bottom Line: It is highly recommended to consult with a reputable financial advisor to create a personalized tax-efficient retirement plan that aligns with your unique situation and objectives.