If Youre Retired, or Not: 5 Changes That Will Affect Your Money in 2025
Amid the global turmoil of this young new year comes a flurry of welcome developments that will help many people — especially retirees and those close to retirement — supercharge their savings, cut prescription drug costs, keep more of the money they earn and, possibly, raise their credit scores.Fair warning, though: It’s complicated.The details of the changes, which are partly tied to the phasing in of provisions from the SECURE 2.0 and Inflation Reduction Act of 2022, can be head spinning.But the payoff — and, in one case, possible penalty — can be substantial.Here is a roundup of the most important changes to retirement savings plans, Medicare, Social Security and consumer regulations that could affect your finances in 2025.A Boost for Retirement SaversFor the first time, people ages 60 to 63 will be able to supersize catch-up contributions to 401(k)s and similar workplace plans beyond the maximum for other savers 50 and older, powering the push to accelerate savings in the years just before retirement.The new catch-up contribution limit for this age group for 2025: $11,250, versus $7,500 for employees ages 50 to 59 or 64 and older.
That’s on top of the $23,500 maximum in 2025 for savers younger than 50, bringing the total allowable contribution for workers 60 to 63 to $34,750 this year.“People at this stage of life may be in their peak earning years, may have paid off their mortgages and often have college funding in the rearview mirror,” said Christine Benz, director of personal finance and retirement planning at Morningstar.“That can create the wherewithal to save more.”We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.
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