For 2025, investors can save more with higher 401(k) plan limits. Employees can defer $23,500 into 401(k) plans, up from $23,000 in 2024. The catch-up contribution limit is $7,500 for workers ages 50 and older.

But thanks to Secure 2.0, there’s a “super catch-up” for investors ages 60 to 63, said certified financial planner Michael Espinosa, president of TrueNorth Retirement Services in Salt Lake City. 

The catch-up contribution for employees ages 60 to 63 jumps to $11,250 for 2025. That brings the total deferral limit to $34,750 for these workers.

“This could be huge” for deferring taxes in 2025, Espinosa said.

Some 15% of eligible participants made catch-up contributions in 2023, according to Vanguard’s 2024 How America Saves report, based on data from 1,500 qualified plans and nearly 5 million participants.

An inherited individual retirement account could boost your nest egg. However, some heirs may face an IRS penalty for missed required withdrawals in 2025, experts say. 

With more focus on shifting economic policy, “it’s easy to see how this one could get buried,” said CFP Edward Jastrem, chief planning officer at Heritage Financial Services in Westwood, Massachusetts.

Since 2020, certain inherited accounts must follow the “10-year rule,” meaning heirs must empty inherited IRAs by the 10th year after the original owner’s death. This applies to heirs who are not a spouse, minor child, disabled, or chronically ill, and certain trusts.

Starting in 2025, the IRS will enforce the penalty on heirs for missed required minimum distributions, or RMDs. The penalty is 25% of the amount that should have been withdrawn. But it’s possible to reduce that penalty if your RMD is “timely corrected” within two years, according to the IRS.

Heirs must take yearly withdrawals if the original IRA owner had reached their RMD age before death.

If you or your spouse work in public service and expect to receive a pension, new legislation could mean higher Social Security benefits in retirement.

Enacted by former President Joe Biden in January, the Social Security Fairness Act ended two provisions — the Windfall Elimination Provision and Government Pension Offset — that lowered benefits for certain government employees and their spouses.

“This change is significant for many retirees who had their benefits eliminated or reduced,” said CFP Scott Bishop, partner and managing director of Presidio Wealth Partners, based in Houston.

The Social Security Administration is working on the timeline for the new legislation and will update its website when more details are available.

For roughly the past five years, federal student loan borrowers who fell behind on their bills didn’t need to worry about the usual consequences, including the garnishment of their wages and retirement benefits.

That will soon change.

In a U.S. Department of Education memo obtained by CNBC, dated Jan. 13, a top Biden administration official laid out for the first time details of when collection activity may resume. In some cases, borrowers could feel the pain as early as this summer.

By late 2024, the number of federal student loan borrowers in default was roughly 5.5 million, the department’s memo said.

Here’s what borrowers struggling to pay their bills need to know about the risks ahead.

Later this year, for the first time, borrowers in default should be able to enroll in the Income-Based Repayment plan “and have a pathway to forgiveness,” the memo says.

Currently, federal student loan borrowers need to exit default before they can access any of the income-driven repayment plans, including the IBR. These plans aim to set borrowers’ monthly bills at a number they can afford, and many end up with a $0 monthly payment.

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Meanwhile, the Biden administration also moved to protect a higher amount of people’s Social Security benefits from the department’s collection powers. When the consequences of defaults resume, those with a monthly Social Security benefit under $1,883 should be able to protect those benefits from offset, compared with the current protected amount of $750 in place today.

“Available data suggest that these actions will effectively halt Social Security offsets for more than half of affected borrowers and reduce the offset amount for many others,” the memo said.

The White House and the U.S. Department of Education did not respond to a request for comment on how the Trump administration plans to handle those measures.

If you don’t know who your loan servicer is, you can find out at Studentaid.gov.

Those who aren’t already in default should contact their loan servicer to avoid that outcome, Mayotte said. You may be able to lower your monthly payments on an income-driven repayment plan or pause your payments through a deferment or forbearance.

The Federal Reserve is expected to hold interest rates steady at the end of its two-day meeting next week, despite President Donald Trump’s comments Thursday that he’ll “demand that interest rates drop immediately.”

So far, the central bank has moved slowly to recalibrate policy after hiking its key benchmark 5.25 percentage points between 2022 and 2023 in an effort to fight inflation, which is still running above the Fed’s 2% mandate. On the campaign trail, Trump said inflation and high interest rates are “destroying our country.”

But for consumers struggling under the weight of high prices and high borrowing costs, there is little relief in sight, for now.

“Anyone hoping for the Fed to ride in as the cavalry and rescue you from high interest rates anytime soon is going to be really disappointed,” said Matt Schulz, LendingTree’s chief credit analyst. 

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The Federal funds rate, which the U.S. central bank sets, is the rate at which banks borrow and lend to one another overnight. Although that’s not the rate consumers pay, the Fed’s moves still affect the borrowing and savings rates consumers see every day.

Once the Fed funds rate eventually comes down, consumers may see their borrowing costs decrease across various loans such as mortgages, car loans and credit cards, making it cheaper to borrow money. 

Here’s a breakdown of how it works:

Since most credit cards have a variable rate, there’s a direct connection to the Fed’s benchmark. But even though the central bank cut its benchmark interest rate by a full percentage point last year, credit card costs remained elevated.

Card issuers are often slower to respond to Fed rate decreases than to increases, said Greg McBride, Bankrate’s chief financial analyst.

Currently, the average credit card rate is more than 20%, according to Bankrate — near an all-time high.

In the meantime, delinquencies are higher and the share of credit card holders making only minimum payments on their bills recently jumped to a 12-year high, according to a Philadelphia Federal Reserve report.

“That means it is maybe more important than ever to get that high-interest debt under control,” Schulz said.

Mortgage rates have risen in recent months, even as the Fed cut rates.

Because 15- and 30-year mortgage rates are fixed and mostly tied to Treasury yields and the economy, they are not falling in step with Fed policy. Since most people have fixed-rate mortgages, their rate won’t change unless they refinance or sell their current home and buy another property. 

“Most mortgage debt is fixed, so existing homeowners are not impacted,” Bankrate’s McBride said. “It just adds to the affordability woes for would-be homebuyers and is keeping home sales on ice.”

The average rate for a 30-year, fixed-rate mortgage is now 7.06%, according to Bankrate.

Auto loan rates are fixed. But these debts are one of the fastest-growing sources of consumer credit outside of mortgage lending. Payments have been getting bigger because car prices are rising, driving outstanding auto loan balances to more than $1.64 trillion.

The average rate on a five-year new car loan is now around 7.47%, according to Bankrate.

“With the Fed signaling that any rate cuts in 2025 will be gradual, affordability challenges are likely to persist for most new vehicle buyers,” said Joseph Yoon, Edmunds’ consumer insights analyst.

“Although further rate cuts in 2025 could provide some relief, the continued upward trend in new vehicle pricing makes it difficult to anticipate significant improvements in affordability for consumers in the new year,” Yoon said. 

Federal student loan rates are also fixed, so most borrowers aren’t immediately affected by any Fed moves.

However, undergraduate students who took out direct federal student loans for the 2024-25 academic year are paying 6.53%, up from 5.50% in 2023-24. Interest rates for the upcoming school year will be based in part on the May auction of the 10-year Treasury note.

Private student loans tend to have a variable rate tied to the prime, Treasury bill or another rate index, which means those borrowers are typically paying more in interest. How much more, however, varies with the benchmark.

As a result of the Fed’s string of rate hikes in recent years, top-yielding online savings accounts have offered the best returns in more than a decade and still pay nearly 5%, according to McBride.

“The good thing about the Fed being on the sidelines is that savers are going to be able to enjoy these inflation-beating yields for some time to come,” McBride said.

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