IRS Announces 2025 Retirement Plan Dollar Limits and Thresholds
The IRS has released the 2025 retirement plan dollar limits and thresholds, reflecting cost-of-living adjustments. These updates impact various retirement savings options, including 401(k) plans, SIMPLE IRAs, and more. Below is a breakdown of the most significant changes.
Key 2025 Limits and Adjustments
- Annual Additions Limit
The contribution limit for 401(k) and other defined contribution plans increases to $70,000 (up from $69,000). - Compensation Limit
The maximum compensation considered for contributions and deductions rises to $350,000 (up from $345,000). - Elective Deferrals
401(k), 403(b), and 457 plans: $23,500 (up from $23,000).
SIMPLE plans and SIMPLE IRAs: $16,500 (up from $16,000). - Catch-Up Contributions
Individuals aged 50 and older (excluding those aged 60–63): $7,500.
Individuals aged 60–63: $11,250.
Roth contributions requirement threshold: $145,000. - Highly Compensated Employees (HCE)
The threshold for identifying HCEs increases to $160,000 (up from $155,000). - Key Employees
The compensation threshold for defining “key employees” under top-heavy rules increases to $230,000 (up from $220,000). - Saver’s Tax Credit
Income limits for the retirement savings contributions credit are as follows:
Married filing jointly: $79,000 (up from $76,500)
Head of household: $59,250 (up from $57,375)
Single filers: $39,500 (up from $38,250) - Control Employees
Officers: $140,000 (up from $135,000).
Other employees: $285,000 (up from $275,000).
Additional Information
The Social Security Administration has separately announced an increase in the taxable wage base for 2025, which also affects various benefit calculations.
