Stay ahead of the curve with the latest updates on US pension changes in 2025.
Increased 401(k) Contribution Limits
In 2025, the annual contribution limit for 401(k) plans will rise to $23,500, up from $23,000 in 2024. This change allows employees to save more for retirement. Additionally, workers aged 60 to 63 can contribute an extra $11,250, providing a significant boost for those looking to catch up on savings.
Social Security Benefit Increases
The Social Security Administration announced a 2.5% Cost of Living Adjustment (COLA) for 2025, resulting in an average monthly increase of $50 for retirees. While this is lower than recent years, it still provides essential support for millions of Americans. The maximum monthly benefit for those retiring at full retirement age will be $4,018, with higher amounts available for those delaying retirement.
Changes to Full Retirement Age
The full retirement age for Social Security benefits will continue to increase gradually. For those born in 1959, the full retirement age is now 66 years and 10 months. This change means that delaying retirement can significantly boost your monthly benefits, with potential increases of up to 8% per year for each year you delay past your full retirement age.
Higher Taxable Earnings Cap
That WILL BE Higher Taxable Earnings Cap.The taxable earnings cap for Social Security contributions will rise to $176,100 in 2025. This increase means higher-income workers will pay more into the system, potentially supporting long-term sustainability of Social Security benefits.