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It’s hard to believe, but it’s almost halfway through 2025. I could have kept my New Year’s resolve to save more for retirement, but that’s fine. You still have time to turn things around.
While it is important to contribute regularly to your retirement account, you should also be aware of changes that affect how your account works and how it can contribute. Here are three things you need to remember, especially if you want to maximize your profits and avoid the opportunities you missed this year.
1. Plans can now be controlled automatically
Automatic registration of retirement plans is a strategy that several plans use to encourage participation. Rather than taking extra steps to sign up, we will automatically withhold a certain percentage of our paycheck for retirement unless we opt out. Auto-registration was previously an option, but in 2025 it has become necessary for new plans.
From the beginning of the year, you need to plan to set an automatic registration rate of 3%, increasing by 1% per year, from 10% to 15% of your salary. However, this does not apply to:
- 401(k) and 403(b) plans that existed before this year
- Small and medium-sized businesses with less than 10 employees
- Companies with less than 3 years
- Church and government plans
So it’s possible that your plan hasn’t done this yet. If you are not enrolled in a retirement plan, it may cost you. You may also miss out on the opportunity to charge a 401(k) match.
You can also reduce yourself if you settle down to the default auto-enrollment rate. Ideally, you want to save 10% to 15% of your income for retirement. If that’s what you can afford to do, then it’s fine to start with less if it’s little, but if you can set aside 3% or more, it’s worth manually increasing your contribution rate. It helps you reach your savings goals much faster.
2. Adults 60-63 can contribute to 401(k)
In addition to the standard contribution limit of $23,500 for adults under the age of 50, you may already know that adults over the age of 50 are permitted to make a catch-up contribution of between $7,500 and 401(k). However, starting this year, there will be a new catch-up and contribution to adults aged 60 to 63.
They can outperform standard contributions up to $11,250, with a total contribution limit of $34,750 in 2025 of 401(k) total. This is a limited time offer to return to the standard $7,500 catch-up contribution when you turn 64.
Obviously, you need extra cash to pull this off. But even if you can’t make the most of your 401(k), anything you don’t spare today will be a little more comfortable leaving you.
3. Part-time workers are more qualified to participate in 401(k)
Until this year, part-time employees had to work for their employers for three consecutive years, and had to work at least 500 hours a year before being eligible to participate in the employer’s 401(k) plan. Now you need to be hired for two consecutive years with 500 hours of work each.
Just as people aged 60-63 have high contribution limits, this change requires leeway and is not always the case. However, savings can help promote your retirement preparation. Hundreds of dollars today are worth thousands or tens of thousands of dollars due to retirement.
It is worth noting that changing your annual retirement account is quite routine. Every year, the government reviews and sometimes increases contribution limits for retirement accounts. And sometimes new laws make broader reforms about how these accounts work. If you want to make the most of your retirement account, it is essential to stay up to date with these changes.
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