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Breaking: 401(k) Limits Jump Again in 2025 – How Much More Can You Actually Save?
Manage episode 503417785 series 2911349
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Key Takeaways
- Inflation's Silver Lining: While we've dealt with inflation in gas, food, and insurance prices, there's a positive side effect - 401(k) contribution limits are increasing
- Current vs. Projected Limits: 401(k) contributions are currently just over $20,000, with experts predicting increases to $22,000 or even $23,000 by year-end
- Monitor Your Plan Limits: Stay informed about maximum contribution limits for your employer's 401(k) plan to take full advantage of increases
- Maximize Employer Matching: Always max out your contributions, especially if your employer offers matching - it's essentially free money and a free raise
- Tax Advantages: Additional 401(k) contributions save you on income taxes, providing a legal way to reduce your tax burden
- Don't Miss Free Money: Employer matching is one of the best benefits available - failing to contribute enough means leaving money on the table
- Legal Tax Avoidance: The government offers 401(k) plans as a legitimate way to reduce taxable income - take advantage of these opportunities
- Stay Updated: Keep watching for new legislation that may further increase 401(k) contribution limits
Action Items for Listeners
- Review your current 401(k) contribution amount
- Check if you're maximizing employer matching
- Monitor upcoming limit changes for 2025
- Consider increasing contributions when new limits take effect
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