IRS Announces Increases on Benefits and Contributions Dollar Limitations for 2025

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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
$160,000 $155,000 $150,000
$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.

Disclaimer: This blog post is valid as of the date published.


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Belfint Lyons Shuman is a Certified Public Accounting (CPA) firm that audits Defined contribution plans (profit-sharing, 401(k), 403(b) , 401(a), 457(b))), and Defined benefit plans (pension and cash balance), and Health and welfare plans. We serve a variety of plan sponsors including for-profit, nonprofit, governmental, and Taft-Hartley collectively-bargained plans located in Delaware, Pennsylvania, New Jersey, Maryland, Washington, D.C., Virginia, Massachusetts, and nationally. For additional information contact us at info@belfint.com