As 2025 approaches, major changes are coming to retirement savings for Americans over 60. The Secure 2.0 Act, which took effect at the end of 2023, introduces new provisions aimed at improving retirement planning.

Here's what you need to know to stay ahead of these shifts in the retirement savings landscape.

Increased contribution limits​

Firstly, the contribution limits for various retirement accounts are on the rise.

In 2025, Americans will be able to contribute up to $23,500 annually to their superannuation accounts, up from the previous limit of $23,000.

This increase provides an opportunity for individuals to bolster their retirement savings, particularly as they approach retirement age.

For those aged 50 or older, the catch-up contribution limit remains at $7,500.

However, a new provision from the Secure 2.0 Act introduces a higher catch-up contribution limit of $11,250 for workers aged 60 to 63.

This is a crucial window for individuals to maximize their savings as they near retirement, potentially offsetting any earlier years where they may not have been able to contribute as much.

IRA adjustments​

The individual retirement account (IRA) limits are holding steady at $7,000, with a catch-up contribution limit of $1,000 for those over 50.

However, income phase-out ranges for IRA deductions have increased, allowing more people to benefit from these tax-advantaged savings vehicles.

For singles covered by a workplace retirement plan, the modified adjusted gross income (MAGI) phase-out range is now $79,000 to $89,000.
For married couples filing jointly, the range has increased to $126,000 to $146,000.

Roth IRA and Saver’s Credit​

Roth IRA enthusiasts will be pleased to know that the income limit range for contributions has also increased.

For singles and heads of household, the range is now $150,000 to $165,000, and for married couples filing jointly, it's $236,000 to $246,000.

Additionally, the income limit for the Saver’s Credit—a nonrefundable tax credit for low- to moderate-income individuals who contribute to a retirement account—has been adjusted upwards across all filing statuses.

Healthcare Savings Accounts (HSAs)​

HSAs, which are an essential tool for managing healthcare costs in retirement, have seen a slight increase in contribution limits.

For 2025, individuals can contribute $4,300, and families can contribute $8,550.

These accounts offer a triple tax advantage and can be a critical component of a comprehensive retirement plan.

Social Security and Medicare​

The cost-of-living adjustment (COLA) for Social Security benefits has been set at 2.5% for 2025.

While this is a modest increase, it reflects the ongoing commitment to adjust benefits in line with inflation.

On the Medicare front, premiums and deductibles are on the rise, which could impact retirees' budgets.

Planning Ahead​

With these changes, it's more important than ever for Americans over 60 to review their retirement strategies.

Consider speaking with a financial advisor to understand how these adjustments affect your individual circumstances.

It's also worth exploring the benefits of contributing more to your superannuation, especially if you're within the 60 to 63 age bracket where the higher catch-up contributions apply.

Social Security Field Offices​

The SSA is moving towards an appointment-based system for face-to-face interactions.

While many services are available online, those who prefer in-person assistance should plan ahead and schedule appointments to avoid inconvenience.

Full Retirement Age (FRA)​

For those born between May 2, 1958, and February 28, 1959, the FRA is arriving in 2025.

This is the age at which you can claim 100% of your retirement benefit.

Claiming benefits before this age will result in a permanent reduction, while delaying benefits past your FRA can significantly increase your monthly payments.

Social Security Taxes​

The income cap for Social Security payroll taxes has increased to $176,100. This means that any work income up to this amount is subject to Social Security taxes, which fund the system.

Auto-Enroll and Part-Time Employees​

New 401(k) and 403(b) plans must now automatically enroll eligible employees, with the option to opt-out or adjust contributions.

Additionally, long-term, part-time employees who meet certain criteria are now eligible for employer-provided 401(k) plans.

Inherited IRAs​

The rules for inherited IRAs have changed, requiring non-spousal beneficiaries to withdraw the entire account within 10 years of the original owner's death.

This accelerates the timeline for mandatory distributions and could have tax implications.

As we navigate these changes, it's clear that staying informed and proactive is key to securing a comfortable retirement.

By understanding the new rules and taking advantage of increased contribution limits and tax credits, Americans over 60 can take control of their financial future and ensure they're well-prepared for the years ahead.

Remember, the retirement savings revolution is not just about adapting to new laws—it's about seizing the opportunity to create a more secure and prosperous retirement.
Are you familiar with the Secure 2.0 Act and how it might affect your savings? How do you feel about the upcoming changes to retirement savings in 2025? Share your thoughts with us in the comments below.