I hope your 2025 is off to a great start! The table below outlines the most relevant IRS increases for retirement plan limits. This is a great opportunity to review your plan contributions and prepare for higher contribution limits in 2025.

The IRS has introduced a new "super catch-up" contribution. Individuals aged 60 to 63 will be eligible for even higher catch-up limits for certain retirement plans, providing a valuable opportunity to accelerate savings during these key pre-retirement years.

2025 Annual Retirement Plan Contribution Limits

As you approach retirement, we can work together to explore strategies for minimizing your future tax liability. One effective approach is considering Roth conversions before reaching the age for Required Minimum Distributions (RMDs). Roth IRAs offer significant advantages that can enhance your long-term retirement strategy:

• Tax-Free Withdrawals:
  Roth IRAs allow for tax-free withdrawals in retirement, provided you are at least 59½ and have held the account for five years. This tax-free income source can provide greater flexibility when managing taxable income levels, especially after RMDs begin.

• No Required Minimum Distributions:
  Unlike traditional IRAs, Roth IRAs are not subject to RMDs, allowing your money to grow tax-free indefinitely. This flexibility supports a more tailored retirement income plan.

• Tax Benefits for Beneficiaries:
  Roth IRAs also benefit your heirs. Beneficiaries can take tax-free withdrawals, offering extended tax advantages depending on their age and the account structure.

How Roth Conversions Work:
When converting a traditional IRA to a Roth IRA, the converted amount is generally taxed as income in the year of conversion. If you are retired and have minimal taxable income—including wages, pensions, investment income and Social Security benefits—you might be able to convert funds without a significant tax impact. For 2024, the standard deduction is $15,000 for single filers and $30,000 for married couples filing jointly.

Please note that while Roth conversions must be completed by December 31st of the year you want them to apply, contributions to your Traditional and Roth IRAs can be made up until your tax filing deadline. For example, if your tax filing deadline is April 15, 2025, you can still make contributions for the 2024 tax year up to that date. Consult with your tax professional to ensure a Roth conversion aligns with your financial goals.

If you’d like to explore whether a Roth conversion makes sense for you, I’d be happy to discuss your options. I look forward to speaking!