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  4. When Does The IRS Set The Yearly IRA Max Amounts? And will Inflation guide it?

When Does The IRS Set The Yearly IRA Max Amounts? And will Inflation guide it?

racecar
  |     |   616 posts since 2014

When does the IRS usually announce the max amount one can contribute to a normal IRA each year? (not 401k)

In 2024 it went up from $6500 (2023) to $7000 (2024), with $1k more if over 50.

I'm trying to figure out what it will be for 2025 and am wondering when the IRS announces those amounts.

And... am I imaginging things or didn't I hear that starting soon (?) it will also include inflation as a guide for setting the amounts due to the "Secure Act 2.0" having passed? Or was that only for 401ks and/or other things, and not when figuring for the old-fashioned plain-jane ($7000 limit in 2024) max amount?

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Answers
calwatch
  |     |   65 posts since 2018
Harry Sit at the Finance Buff will calculate these as the year goes by. It's unlikely it will go to $7,500 barring some unusual spike in inflation in 2025 but should get there in 2026. https://thefinancebuff.com/401k-403b-ira-contribution-limits.html
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denki
  |     |   157 posts since 2019
Yes, it's not clear from the various websites if the larger catch up for 60-63 is to be only for employer/401k plans or also people who just have ira cds at navy federal. Aarp seems to indicate its for all but other websites like investopia seem to indicate only for employer plans. Maybe that's because most people have employer plans or that's what that website concentrates on but I'd like to know for sure if it's also for people who just have ira cds at a bank. I followed a link to the actual Secure Act bill but of course when I found the relavant part, the higher catch up limits for 60-63, it simply referred to the current laws or statutes already in place and just had language changing a few words or lines in them, like "line 100 in section 99 of statue 123456 shall be replaced with $10,000 instead" and I couldn't find the current statute it was referring to, to see the language and what kind of plans it's talking about, so unless someone is an expert it's near impossible to find out for sure at this point
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Ally6770
  |     |   4,290 posts since 2010
We might have to wait until the publication 590 is published for income taxes for that year. Maybe your federal rep or senators office could help you with the information.
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Ally6770
  |     |   4,290 posts since 2010
After reading more articles I believe it is only for employer sponsored accounts and only if they allow it.
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