Forgetting About These 3 2025 Retirement Account Changes Could Cost You

Though it's hard to believe, we're nearly halfway through 2025. You may have let your New Year's resolution to save more for retirement fall by the wayside, but it's OK. You've still got time to turn things around.

Making regular contributions to your retirement account is key, but you also need to stay aware of changes that affect how your accounts work and how much you can contribute. Here are three in particular that you need to remember if you want to maximize your gains and avoid costly missed opportunities this year.

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1. Plans can now auto-enroll you

Retirement plan auto-enrollment is a strategy some plans use to encourage participation. Rather than having you take extra steps to sign up, they automatically withhold a certain percentage of your paychecks for retirement unless you opt out. Auto-enrollment used to be optional, but in 2025, it became required for new plans.

Since the beginning of the year, plans have been required to set up a 3% automatic enrollment rate that increases by 1% per year until it reaches between 10% and 15% of your salary. However, this doesn't apply to the following:

• 401(k) and 403(b) plans that were in existence before this year
• Small businesses with 10 or fewer employees
• Businesses less than three years old
• Church and governmental plans

So it's possible that your plan may not be doing this yet. That could be costly for you if you haven't enrolled yourself in your retirement plan, because it means you're missing out on a valuable opportunity to grow your savings. You may also be missing the chance to claim a 401(k) match, which can take some of the burden of retirement savings off your shoulders.

You could also short-change yourself if you just settle for the default auto-enrollment rate. Ideally, you want to save between 10% and 15% of your income for retirement. It's fine to start with less if that's all you can afford to do, but if you can set aside more than 3%, it's worth increasing your contribution rate manually. It'll help you reach your savings goal much faster.

2. Adults 60 to 63 can contribute more to 401(k)s

You may already know that adults 50 and older are allowed to make catch-up contributions of $7,500 to 401(k)s in addition to the $23,500 standard contribution limit for adults under 50. But beginning this year, there's a new catch-up contribution for adults aged 60 to 63.

They can set aside up to $11,250 above the standard contribution, bringing their total 401(k) contribution limit to $34,750 in 2025. This is a limited-time offer, as you go back to the standard $7,500 catch-up contribution when you turn 64. So it's worth taking advantage of if you can.

Obviously, to pull this off, you'd need to have a lot of extra cash to spare. But even if you don't manage to max out your 401(k), anything you can spare today will make you a little more comfortable in retirement.

3. Part-time workers become eligible for 401(k) participation faster

Up until this year, part-time employees had to work for their employer for three consecutive years and have at least 500 hours of service in each year before they became eligible to participate in the employer's 401(k) plan. Now, you need just two years of consecutive employment with 500 hours of service in each.

As with the higher contribution limits for those aged 60 to 63, taking advantage of this change requires you to have cash to spare, and that's not always the case. But if you can save even a little, this could help you increase your retirement readiness. A few hundred dollars today could be worth thousands or tens of thousands of dollars by retirement.

It's worth noting that annual retirement account changes are pretty routine. Every year, the government reviews and sometimes increases retirement account contribution limits. And every once in a while, a new law makes broader reforms to how these accounts work. Staying up to date on these changes is essential if you want to get the most out of your retirement accounts.

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