The Internal Revenue Service has announced adjustments on the limitations affecting retirement plans. In particular, participants can now elect to defer up to $23,500 to 401(k), 403(b), and 457(b) Plans in 2025 compared to $23,000 in 2024.
Below is a chart that outlines updated employee benefit plan limits:
PLAN LIMITS |
|||
| RETIREMENT & SOCIAL SECURITY | 2025 Limit | 2024 Limit | 2023 Limit |
| Section 401(k), 403(b), 457(b) Elective Deferrals | $23,500 | $23,000 | $22,500 |
| 401(k) or 403(b) Catch Up Contributions | $7,500 | $7,500 | $7,500 |
| 401(k) or 403(b) Catch Up Contributions for those attaining age 60-63 in 2025 | $11,250 | — | — |
| Section 415 – Defined Contribution Plan Maximum Annual Contributions without Catch Up | $70,000 | $69,000 | $66,000 |
| Section 415 – Defined Benefit Plan Maximum Annual Benefit | $280,000 | $275,000 | $265,000 |
|
Section 414(q)(1)(B) – Highly Compensated Employee – Minimum Compensation (applies to lookback years in indicated year)
|
$160,000 | $155,000 | $150,000 |
|
Section 416 – Key Employee Definition – Officer Compensation
|
$230,000 | $220,000 | $215,000 |
| Section 416 – Key Employee Definition – 1% Owner Compensation | $160,000 | $150,000 | $150,000 |
| Section 401(a)(17) – Maximum Includible Annual Compensation | $350,000 | $345,000 | $330,000 |
| IRA or Roth IRA Annual Contribution Limit | $7,000 | $7,000 | $6,500 |
| IRA or Roth IRA annual catch up contributions | $1,000 | $1,000 | $1,000 |
| SIMPLE Salary Deferral Limit | $16,500 | $16,000 | $15,500 |
| SIMPLE Catch-Up Limit | $3,500 | $3,500 | $3,500 |
This new information should be passed along to participants by Plan administrators to ensure they have all the required information when planning their contributions in 2025.
