Securing Your Future: Important Retirement Savings Updates for 2025

Good afternoon, everyone. We would like to discuss some important developments in retirement savings as of February 27, 2025. These changes could significantly impact how we all plan for our future.

First, let's discuss the new contribution limits for 2025. If you're under 50, you can now put up to $23,500 into your 401(k). This significant increase from last year opens up new possibilities for your retirement savings. For IRAs, the limit is now $7,000. And if you're 50 or older, you can add an extra $7,500 to your 401(k) as a catch-up contribution, providing a promising boost to your retirement fund.

Now, here's something exciting for those of you nearing retirement. You can make even more significant catch-up contributions if you're between 60 and 63. You can now put an additional $11,250 into your 401(k). That means you could contribute up to $34,750 this year. That's a significant opportunity to boost your savings in those crucial years before retirement.

I've got some encouraging news from Fidelity Investments as well. They're reporting that retirement account balances are growing, which should give us all a sense of reassurance. The average 401(k) balance reached $131,700 by the end of last year - an 11% increase. IRA balances are up, too, averaging $127,543. And get this - the number of 401(k) millionaires increased by 27% last year. There are now 537,000 of them out there!

Lastly, I want to mention a new policy that's just taken effect. Starting this year, new employees will be automatically enrolled in their employer's retirement plan. Your contributions will start at a percentage of your pre-tax income and increase by 1% yearly. Of course, you can opt-out, but this is designed to help more people start saving earlier.

These changes are all about giving us more opportunities to save for retirement. Whether you're just starting your career or counting down the years to retirement, new options are available to help secure your financial future.

Remember, it's always a good idea to consult a financial advisor to understand how these changes might affect your retirement strategy. This professional guidance can provide you with the support and direction you need to make the most of these new opportunities.

Disclosure

The information provided in this presentation is for general informational purposes only and does not constitute investment, legal, or tax advice. It should not be considered a recommendation to buy or sell any specific securities or to adopt any particular investment strategy.

The contribution limits, catch-up provisions, and other retirement plan features mentioned are based on current IRS regulations as of February 27, 2025, and are subject to change. Individuals should consult with a qualified tax professional regarding their specific situation.

The retirement account balance data and statistics cited from Fidelity Investments represent past performance, which is not a guarantee of future results. The value of investments can go down as well as up, and investors may get back less than they invested.

Automatic enrollment in employer-sponsored retirement plans is subject to individual plan rules and may not be available for all employees or in all circumstances. Employees should review their specific plan documents and consult with their employer's HR department for details.

This presentation contains forward-looking statements about retirement savings trends and policies. These statements are subject to various risks and uncertainties that could cause actual results to differ materially from those projected.

Investors should carefully consider their investment objectives, risks, charges, and expenses before investing. For more complete information, please consult the prospectus or summary prospectus of any fund mentioned.

Sources

https://401kspecialistmag.com/401k-millionaire-ranks-grew-27-in-2024-fidelity/

https://www.irs.gov/retirement-plans/cola-increases-for-dollar-limitations-on-benefits-and-contributions

https://www.shrm.org/content/dam/en/shrm/business-solutions/SECURE_Act_20_Retirement_Plan_Takeaways_White_Paper_SHRM_FINAL.pdf

https://www.foxbusiness.com/personal-finance/401k-balances-hit-second-highest-record-fidelity

https://www.missionsq.org/plan-sponsors/plan-rules/contribution-limits

https://www.paychex.com/articles/compliance/secure-act-auto-enrollment-mandate

https://401kspecialistmag.com/record-high-number-of-401k-millionaires-average-account-balances-at-fidelity/

https://www.tiaa.org/public/plansponsors/colalimits

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