2025 TSP Contribution Limit Increasing 2.2%

The 2025 contribution limit to the Thrift Savings Plan is increasing to $23,500 per year, an increase of 2.2% over the 2024 annual limit ($23,000), according to an announcement from the Internal Revenue Service.

The catch-up contribution limit for 2025 will remain the same at $7,500. This allows federal employees age 50 and up to make this extra contribution to the TSP each year (for a total of $31,000) to further boost their retirement savings.

There is also an even higher catch-up contribution limit starting in 2025 under a provision in the Secure Act 2.0. The catch-up contribution for workers aged 60, 61, 62 or 63 is $11,250.

2025 IRA Contribution Limits

The 2025 IRA annual contribution limit will remain $7,000. It increased last year when it went up from $6,500 in 2023, a 7.7% increase.

The IRA catch-up contribution limit for individuals age 50 and over was amended under the SECURE 2.0 Act of 2022 to include an annual cost‑of‑living adjustment but remains $1,000 for 2025. Individuals who utilize this option will be able to contribute a total of $8,000 per year to an IRA in 2025.

2025 Roth IRA Income Phase-Out Ranges

The income phase-out range for Roth IRA contributions will be increased to between $150,000 and $165,000 for singles and heads of household, up from between $146,000 and $161,000 in 2024.

For married couples filing jointly, the income phase-out range is increased to between $236,000 and $246,000, up from between $230,000 and $240,000 in 2024.

The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

2025 Traditional IRA Income Phase-Out Ranges

According to the IRS, taxpayers can deduct contributions to a traditional IRA if they meet certain conditions. If during the year either the taxpayer or the taxpayer’s spouse was covered by a retirement plan at work, the deduction may be reduced, or phased out, until it is eliminated, depending on filing status and income. (If neither the taxpayer nor the spouse is covered by a retirement plan at work, the phase-outs of the deduction do not apply.)

These are the traditional IRA phase-out ranges for 2025:

• For single taxpayers covered by a workplace retirement plan, the phase-out range is increased to between $79,000 and $89,000, up from between $77,000 and $87,000. 
• For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is increased to between $126,000 and $146,000, up from between $123,000 and $143,000. 
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is increased to between $236,000 and $246,000, up from between $230,000 and $240,000. 
• For a married individual filing a separate return who is covered by a workplace retirement plan, the phase-out range is not subject to an annual cost-of-living adjustment and remains between $0 and $10,000.

Past Annual TSP Contribution Limits

The increase in inflation over the last few years has led to some of the largest cost of living adjustments (COLAs) for federal retirees in 40+ years. The 2022 COLA was 5.9%, the largest in 40 years at that time, the 2023 COLA was even higher at 8.7%, and the 2024 COLA was 3.2%. The 2025 COLA will be 2.5%, lower than recent prior years but still higher than the 2010s when there were some years with a zero COLA (2010 and 2015) or near zero (2016 – 0.3%).

Rising inflation also helped drive up the annual TSP contribution limits because they are subject to annual cost of living adjustments. The annual TSP contribution limit has risen 34.3% since 2013. The last four years account for over half of that increase (20.5% since 2021).

The table below shows the annual TSP limits going back to 2013.