On November 1st, 2024, the IRS announced cost-of-living adjustments, changing dollar limitations for retirement accounts for the tax year 2025. Here are the highlights that employers should be aware of:
| Plan Limits for Year: |
2025 |
2024 |
2023 |
| 401(k), 403(b), 457 Elective Deferrals |
$23,500 |
$23,000 |
$22,500 |
| 401(k), 403(b), 457 Catch-Up Contribution Limit (age 50 or over) |
$7,500 |
$7,500 |
$7,500 |
| 401(k), 403(b), 457 Super Catch-Up Contribution Limit* (age 60, 61, 62, or 63) |
$11,250 |
- |
- |
| Annual Defined Contribution Plan Limit |
$70,000 |
$69,000 |
$66,000 |
| Annual Compensation Limit |
$350,000 |
$345,000 |
$330,000 |
| Highly Compensated Employees |
$160,000 |
$155,000 |
$150,000 |
| Key Employee Officer in a Top-Heavy Plan |
$230,000 |
$220,000 |
$215,000 |
| SIMPLE Employee Deferrals |
$16,500 |
$16,000 |
$15,500 |
| SIMPLE Catch-Up Deferral |
$3,500 |
$3,500 |
$3,500 |
| SIMPLE Super Catch-Up Deferral** (age 60, 61, 62, or 63) |
$5,250 |
- |
- |
| SEP Minimum Compensation |
$750 |
$750 |
$750 |
| Traditional IRA Contribution Limit |
$7,000 |
$7,000 |
$6,500 |
| Traditional IRA catch-up Contribution Limit (age 50 or over) |
$1,000 |
$1,000 |
$1,000 |
| Social Security Wage Base |
$176,100 |
$168,600 |
$160,200 |
Looking for the limits that impact employees directly? Check them out here.
For full list of limitations for retirement-related items for tax year 2025, please visit IRS.GOV.
*For plans which adopted this voluntary SECURE 2.0 provision: A higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in these plans. For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500.
**For plans which adopted this voluntary SECURE 2.0 provision: A higher catch-up contribution limit applies for employees aged 60, 61, 62 and 63 who participate in SIMPLE plans. For 2025, this higher catch-up contribution limit is $5,250.
Source: Internal Revenue Service Notice 2024-80, Internal Revenue Service Notice 2024-25.
Please note, annual contribution rates are based on the IRS 2025 retirement plan limitations and are subject to change. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice.
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