Key Investment Rule Changes for 2025:
What You Need to Know
As we enter 2025, several changes to investment rules could significantly affect how you manage your finances. Whether you’re planning for retirement or optimizing taxes, understanding these updates is crucial. Here’s a brief rundown of the key changes:
1. Higher Contribution Limits for Retirement Accounts
In 2025, the IRS has increased contribution limits for retirement accounts:
- 401(k): $23,000 for those under 50, $30,500 for those 50 and older.
- IRAs: $7,000 for those under 50, $8,000 for those 50+.
This allows you to save more on a tax-deferred basis, accelerating your retirement planning. The IRA contribution limits remain unchanged
2. Changes to Required Minimum Distributions (RMDs)
The age to start RMDs has been raised:
- 73 for those born between 1953-1960.
- 75 for those born after 1960.
This gives you more time to let your retirement savings grow before withdrawing.
3. Capital Gains Tax Adjustments
In 2025, the thresholds for long-term capital gains taxes will rise due to inflation adjustments. While tax rates remain the same, the higher thresholds may push you into lower tax brackets for capital gains, depending on your income.
4. SECURE Act 2.0 Updates
Several provisions from the SECURE Act 2.0 kick in:
- Automatic 401(k) Enrollment: Employers must automatically enroll workers in 401(k) plans.
- Higher Catch-Up Contributions: Workers aged 60-63 can contribute up to $10,000 more to 401(k)s.
- Emergency Savings Access: Workers can access 401(k) funds without penalty in certain emergencies.
Lakewood Wealth Insights
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