The IRS has recently released the 2025 retirement plan contribution limits. For super-savers at Shell, this is great news. Shell employees can now contribute $23,500 (or $31,000 for those over 50 years old) of pre-tax or Roth savings to the Shell Provident Fund and can get up to $85,550 (or $95,050 for married couples aged 55-60) of retirement savings into tax-efficient vessels including the HSA, in 2025.
Shell offers a 10% contribution to 401(k)accounts for employees who have been with the company for over nine years. Since the annual 401(k) income limit for 2025 is now $350,000, Shell will cap company contributions to the Provident Fund at $35,000.
If you’re under age 50, the total IRS limit for 401(k) contributions in 2025 from employee or employer contributions is $70,000. Here's how it breaks out:
Before reaching age 55, when an additional HSA catch-up comes into play, your contributions could look like this:
If you’re age 55-59 or over 63, the total IRS limit for 401(k) contributions in 2025 from employee or employer contributions is $77,500, broken out as follows:
If you max out all of these sources and the full HSA contribution limit for families with an individual catch-up because you're over 55, you could save over $95,050 in tax-efficient vessels in 2025!
Employees aged 60 to 63 after January 1, 2025, can contribute even more to workplace retirement plans thanks to legislation under Secure Act 2.0. Individuals in this age group have a higher catch-up contribution amount, indexed each year for inflation.
Instead of the standard catch-up amount of $7,500 for individuals aged 50-59 or 63+, savers aged 60-63 can leverage a catch-up amount of $11,250 in 2025 to boost their retirement savings. Here's how it breaks out across sources:
This change provides a valuable opportunity for older employees to enhance their retirement savings as they approach retirement. Employees in this 3-year age bracket maxing out their Provident Fund, a family HSA with catch-ups, and backdoor Roths can save up to $98,800 in 2025!
The annual compensation limit for 2025 has increased from $345,000 to $350,000. If you make over $350,000 in base and bonus compensation for 2025, remember to max out your Provident Fund contributions before reaching that income threshold. After you earn $350,000 of income, both you and Shell can no longer contribute to the Provident Fund.
In 2025, once you earn more than $350,000, Shell will contribute to the Shell Provident Fund BRP (Benefit Restoration Plan) instead of the Shell Provident Fund. If 2025 is the first year you expect to make over $350,000, check that you have an allocation and investment strategy for your Provident Fund BRP. The 2025 limit adjustments will be advantageous for super-savers at Shell, and it is crucial to be sure that you make the most of these changes.
The IRA contribution limit for 2025 stays at $7,000 ($8,000 if over age 50). Though many are prevented from directly contributing to a Roth IRA, many Shell employees can take advantage of the backdoor Roth strategy to get more saved in Roths each year.
Additionally, if you are contributing after-tax dollars to the Shell Provident Fund, you can roll out the after-tax funds annually to a Roth IRA to take advantage of the mega backdoor Roth strategy for additional tax savings over time.
A Health Savings Account (HSA) is often an under-utilized benefit that provides a unique triple tax advantage for those looking to save more each year:
When using an HSA as a retirement fund, Shell employees can benefit from both tax deductions and tax-free growth, making HSAs a valuable tool for long-term savings and retirement planning.
At Willis Johnson & Associates, we work with our Shell clients to help them get the full 10% company contribution, take advantage of backdoor Roth IRAs, and facilitate after-tax roll-outs from the Provident Fund to get the maximum savings. If you have any questions about the 2025 contribution and compensation limits, please contact your advisor or schedule a free consultation with one of our Shell specialists.