5 Key Changes That Will Affect Your Money in 2025 – The New York Times

Amidst the global turmoil of this young new year, many people, especially retirees and near-retirees, are looking to increase their savings, reduce the cost of prescription drugs, keep more of the money they earn, and in some cases, withdraw their funds. There are a number of welcome developments that will help you procure. their credit score.

But, fair warning: It's complicated.

The details of the changes, which relate in part to the phase-in of SECURE 2.0 and the provisions of the Inflation Control Act of 2022, may be dizzying. But the rewards, and possibly penalties, can be significant.

Here we summarize the most important changes to retirement savings plans, Medicare, Social Security, and consumer regulation that could impact your finances in 2025.

Supporting retirement savers

For the first time, people between the ages of 60 and 63 will be able to supersize catch-up contributions to 401(k)s and similar workplace plans, exceeding the maximum amount for other savers over the age of 50. This will give you the impetus to accelerate your savings in the preceding years. retirement.

new Catch-up contribution limit For this age group in 2025: $11,250; $7,500 for employees ages 50-59 or 64 and older. This is on top of the 2025 cap of $23,500 for savers under age 50, bringing the total allowable contributions for workers aged 60 to 63 this year to $34,750.

“People at this stage in life are at their earning peak, have paid off their mortgage, and often have college funds in the rearview mirror,” says Morningstar Personal Finance and said Christine Benz, director of retirement planning. “Doing so could create additional ways to save money.”