Your 401k, Roth IRA, and HSA are About To Change

In this video, key updates to retirement accounts for 2025 and beyond are highlighted, covering changes to 401(k)s, IRAs, HSAs, and more. From increased contribution limits and new catch-up rules to expanded Roth options and automatic enrollment features, these updates aim to enhance retirement savings strategies. The video also touches on recent changes, like Roth matching contributions, student loan repayment benefits, and emergency withdrawal allowances, helping viewers navigate the evolving retirement landscape and optimize their financial plans.

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Big changes are coming to retirement accounts, including 401(k)s, IRAs, HSAs, and others, starting in 2025. Understanding these updates can help individuals optimize their savings strategies and take full advantage of new opportunities.

One significant change is the introduction of automatic enrollment and escalation for 401(k) and 403(b) plans. New hires will be automatically enrolled at a minimum 3% contribution rate, with annual increases of 1% until a maximum rate (10-15%) is reached. This change is expected to boost participation and savings rates among future retirees. Additionally, long-term part-time employees will gain eligibility for 401(k) plans, provided they meet certain work hour requirements.

Catch-up contributions for those aged 50-63 are also seeing updates. Starting in 2025, individuals aged 50-59 can contribute an additional $7,500 annually, while those aged 60-63 may contribute up to $11,250, increasing their total contribution limits. From 2026 onward, high earners making over $145,000 will be required to direct catch-up contributions to Roth accounts.

Roth IRAs will see an expanded income phase-out range, making it easier for higher earners to contribute, and inherited IRA rules are changing to mandate that funds be fully distributed within ten years in most cases. HSAs will also have higher contribution limits in 2025, rising to $4,300 for individuals and $8,550 for families.

Notable changes from recent years remain relevant. For example, employers can now offer Roth matching contributions, and new rules allow 529 plan funds to roll over into Roth IRAs under specific conditions. Additionally, starting in 2024, employees paying off student loans may qualify for retirement contribution matches from their employers.

Finally, emergency withdrawals of up to $1,000 annually from retirement plans are now permitted without incurring early withdrawal penalties, though restrictions apply. These updates reflect an evolving retirement landscape, and staying informed is essential to maximizing savings and long-term financial security.

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Disclaimer: This video is for entertainment purposes only. Everyone's situation is different so do your own research before making any decisions with your money.

[kevinberta]

It is amazing the the social security tax ceiling is raising by thousands each year but the 401k limit only goes up by $500.

[nicolicarpathia]

Automatic *forced employee* contributions? Sounds like they’re planning to move on social security and use this new 401K model as a “replacement.”

[LastCalvertStanding]

Thank you for diving right in to the facts! Appreciate your thoroughness

[gregmcfarland]

“Financial understanding” should be a required high school course. This should include how to take and payoff early mortgages and the benefits of savings in each of the various forms available (savings, stocks, bonds).

[PeterVanDeMotter]

2:27 Another way to make it even better is to set up accounts that all workers can participate in, regardless of whether their employer chooses to offer one.

[marcenelj]

You should clarify that the income we should keep track of direct roth IRA contribution is the MAGI, not gross income.

[educatedwanderer]

I have been trying to coach my coworkers toward contributions of 15% or more as a goal in their 401k's for the last decade. Seems the gov't has the same idea.

[Maulhawk]

3:50 Talking about employer match, my company does a lump sum for the year at the end of the year and it's only a percentage of my base pay, the match doesn't apply to any bonuses nor does it apply to overtime pay.

[MechEB]

Finally...one of your videos was recommended.

[Hogue_Indiana]

Thanks Jarrad. I find myself watching some of these videos and only 20% of it pertains to my life. I still enjoy learning from the whole video. Well DONE!

[tehcodingmonkey]

i'm inclined to say i like the automatic savings, but many 401k providers i've seen have crazy high "fees" for saving money with them, so i don't feel i entirely agree

[AYLove]

Concise yet full of details. Thank you! I subscribed to the channel right away.

[calvinhalladay]

Thanks Jarrad, I’ve watched all these 2025 tax code change videos from all the YouTube personal finance channels and your video is by far the best. Appreciate the clear and concise information.

[charmin]

Default decision is set to be beneficial.

[gabe]

Im for forced 401k but we have to remove social security tax first, until then this is BS

[Yourengineeringstandpt]

Ty, for the info, vary educational video appreciation is well deserved

[sochillyinak]

Auto enrollment is such an awesome idea! I've read the same behavioral research, and im glad to see its being out into practice

[OrangeTuxRad]

"This all sounds great to me, but I could see how some people might think that they're bad. I don't know what to think." ~Kevin Malone

[iceman]

I always look forward to seeing how much the IRS lets me keep. They're so generous.

When will the predatory taxation end?

[NotAFanMan]

Interesting that the catch up contributions have to go to roth over that income amount for the 401k. Roth is the goat.