Congress passed the Secure 2.0 Act in 2022 to expand saving opportunities for individuals who have access to savings vehicles like 401(k)s and workplace savings plans. Several of the bill’s provisions go into effect in 2025 and if you’re like many workers, your 401(k) or workplace savings plan is likely the foundation of your retirement savings strategy. Explore the changes happening to 401(k)s below to determine if your retirement savings strategy may be affected.
Expanded standard contribution limits for all. For those that are able to “max out” their workplace savings plan, there is an increased contribution limit in 2025. Employees of any age will have the ability to save up to $23,500 (or 100% of their income, whichever is less) in their 401(k) plan. This is a $500 increase over the 2024 contribution limit1.
Special rules for those ages 60 to 63. Under SECURE 2.0 Act provisions, 2025 brings new savings limits for those who turn age 60, 61, 62 or 63 by the end of the calendar year if their plans offer catch-up contributions. Individuals in this age segment can take advantage of a new, special catch-up contribution limit that enhances their savings opportunity. Rather than the standard $7,500 catch-up contribution, those ages 60-63 can save $11,250 in 20251.
The new savings limits create an important opportunity, particularly for those who later in life might be in a financial position to dedicate larger sums toward retirement savings. For those ages 60-63, total 2025 401(k) contributions top out at $34,7502. The special catch-up provision means someone turning 60 in 2025 could set aside close to $140,000 in tax-deferred retirement savings over a critical four-year period. Once you turn 64, the standard catch-up contribution limit of $7,500 again applies. Talk to your financial adviser to determine if taking advantage of these increased contributions limits makes sense for your retirement plan.
Automatic enrollment. The SECURE 2.0 Act provisions expand automatic enrollment in 401(k) and 403(b) plans to companies that have employees who are not already enrolled. Under the rules, plans established on or after Dec. 29, 2022, must, in 2025, implement an automatic enrollment feature. This means that employees, by default, will be enrolled to participate in the plan. The minimum automatic enrollment contribution percentage for 401(k) or 403(b) plans is 3% of annual income and cannot exceed 10%. It also requires that the amount deferred into the plan increase by 1% per year until the 10% deferral level is reached 2. Employees can choose to opt out of plan participation, but this automatic enrollment feature is set to encourage employees to take advantage of workplace retirement savings plans. Check with your employer to see if the automatic enrollment feature will affect your contributions.
Determining how much to set aside for retirement and in what types of savings vehicles is best decided through careful planning. The start of a new year is a great time to consider if you want to change or start contributions to these types of accounts. Discuss your retirement strategy with your financial adviser and consult with a tax professional on all tax-related matters.
2 — “Notice 2024-80, 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living” Internal Revenue Service.
2 — “Five Changes Coming to IRAs and 401(k)s in 2025”, November 2025. Compiled by Kiplinger Magazine. https://www.kiplinger.com/retirement/iras/changes-coming-to-iras-next-year
Chris Thompson, CFP ®, CRPC ®, CMFA ® is a Private Wealth Advisor and Managing Director with Upper Deck Wealth Management — a financial/private wealth advisory practice of Ameriprise Financial Services, LLC in Ponte Vedra Beach FL. His team specializes in fee-based financial planning and asset management strategies, and he has been in practice for 31 years. To contact him, www.ameripriseadvisors.com/team/upper-deck-wealth-management, 904-380-2290, 818 A1A N, Suite 301, Ponte Vedra Beach, FL 32082.
Certified Financial Planner Board of Standards, Inc. (CFP Board) owns the CFP® certification mark, the CERTIFIED FINANCIAL PLANNER™ certification mark, and the CFP® certification mark (with plaque design) logo in the United States, which it authorizes use of by individuals who successfully complete CFP Board’s initial and ongoing certification requirements.
The Certified Military Financial Advisors program is not affiliated or endorsed by the U.S. Department of Defense, or any other federal or state government program. For the most current rules, regulations and laws regarding benefits offered through the federal government or Department of Defense, please consult with their websites or contact the appropriate offices directly.
Investment products are not insured by the FDIC, NCUA or any federal agency, are not deposits or obligations of, or guaranteed by any financial institution, and involve investment risks including possible loss of principal and fluctuation in value.
Ameriprise Financial, Inc. and its affiliates do not offer tax or legal advice. Consumers should consult with their tax advisor or attorney regarding their specific situation.
Ameriprise Financial cannot guarantee future financial results.
Securities offered by Ameriprise Financial Services, LLC. Member FINRA and SIPC.
© 2025 Ameriprise Financial, Inc. All rights reserved.
File # AMP7383253.1-RUSH (Approved until 01/31/2027)
