Push it to the limit! Texa$aver contribution limits increase in 2025 📈
2-minute read
Every year, the Internal Revenue Service (IRS) announces retirement plan contribution limits for the upcoming tax year. Calendar Year 2025 limits will increase for Texa$averSM 401(k) / 457 Program participants from $23,000 to $23,500. This means the maximum you can save is $23,500 in your 401(k) and/or 457 unless you’re eligible to make catch-up contributions. If you have a 401(k) and 457 account, you can contribute up to $23,500 in each of them, for a total maximum retirement savings contribution of $47,000 without a catch-up contribution.
So what’s a catch-up contribution?
The IRS allows you to make additional catch-up contributions if you under-contributed in prior years and you are:
- age 50 or over or
- three years away from your normal retirement age. Normal retirement age is usually 65, but you might be eligible sooner based on your retirement eligibility with your agency or higher education institution. You can contact Empower to discuss catch-up contribution eligibility.
Check out the three types of catch-up contributions below.
Standard age 50 and over catch-up contribution
In 2025, the catch-up contribution limit is $7,500 and is in addition to the standard deferral limit of $23,500. This means you can contribute a total of $31,000 in 2025 if you’re at least 50 years old.
Special 457 catch-up contributions
The 457 special catch-up contribution has increased from $23,000 to $23,500 and allows you to contribute up to twice the normal contribution amount in the calendar year. This means you can contribute a total of $47,000 during the calendar year if eligible. It cannot be used with the standard age 50 and over catch-up.
Higher catch-up contributions for those aged 60, 61, 62 or 63
The SECURE 2.0 ACT of 2022 improves retirement savings options and expands coverages for deferred compensation programs like Texa$aver. Under a change made in Secure 2.0, a higher catch-up contribution limit applies for participants aged 60, 61, 62 and 63.
Beginning Jan. 1, 2025, during the years you turn ages 60, 61, 62 and 63 you can save an extra $10,000 or 150% of the regular annual catch-up limit (whichever is greater) in catch-up contributions. For 2025, the higher catch-up contribution limit for participants ages 60 to 63 is $11,250 instead of $7,500. The contribution standard limit resumes the year you turn 64.
If you’re curious if you’re eligible to make catch up contributions, you can contact Empower at (800) 634-5091 to confirm your eligibility. You can also visit the IRS website for more information on 2025 contribution limits.