After releasing the inflation adjusted income tax brackets in October, the IRS has issued Notice 2024-80, 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living.
Historically, the limits are adjusted on a yearly basis for cost-of-living adjustments (excluding the individual retirement account (IRA) catch-up contribution limit which is set by statute and not adjusted for cost-of-living) but each year there are some changes to other items.
The 2025 limits are effective as of January 1, 2025.
|
Trend of retirement plan limitations |
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|
|
2025 |
2024 |
2023 |
2022 |
|
401(k), 403(b) and 457 elective deferral limit |
$23,500 |
$23,000 |
$22,500 |
$20,500 |
|
Catch-up contribution limit (age 50 and older) |
$7,500 |
$7,500 |
$7,500 |
$6,500 |
|
Catch-up contribution limit (age 60, 61,62, or 63) |
$11,250 |
n/a |
n/a |
n/a |
|
Defined contribution plan limit |
$70,000 |
$69,000 |
$66,000 |
$61,000 |
|
Annual compensation limit |
$350,000 |
$345,000 |
$330,000 |
$305,000 |
|
Definition of highly compensated employee |
$160,000 |
$155,000 |
$150,000 |
$135,000 |
|
Key employee |
$230,000 |
$225,000 |
$215,000 |
$200,000 |
|
Defined benefit plan limit |
$280,000 |
$275,000 |
$265,000 |
$245,000 |
|
Trend of IRA limits |
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|
|
2025 |
2024 |
2023 |
2022 |
|
IRA contribution limit |
$7,000 |
7,000 |
$6,500 |
$6,000 |
|
IRA catch-up contributions (age 50 and up) |
$1,000 |
$1,000 |
$1,000 |
$1,000 |
|
SIMPLE IRA and SIMPLE 401(K) salary deferral limit |
$16,500 |
$16,000 |
$15,500 |
$14,000 |
|
SIMPLE IRA and SIMPLE 401(K) catch-up limit |
$3,500 |
$3,000 |
$3,500 |
$3,000 |
|
SIMPLE IRA and SIMPLE 401(K) catch-up limit (age 60, 61, 62, or 63) |
$5,250 |
n/a |
n/a |
n/a |
|
Qualified Retirement Contribution Income Thresholds |
||
|
Filing status |
2025 |
2024 |
|
Married Filing Jointly |
$126,000-146,000 |
$123,000-143,000 |
|
All Other Taxpayers |
$79,000-89,000 |
$77,000-87,000 |
|
Married Filing Separately |
$0-10,000 |
$0-10,000 |
|
Spouses Who Are Not Active Participants |
$236,000-246,000 |
$230,000-240,000 |
Plan for 2025 based IRS updates
Business owners and individuals should plan for 2025 with these figures in mind to position themselves for success. There are concerns that the election may have a substantial impact on tax matters, but taxpayers should not try to rely on predictions or wait for something to happen. Fill out the form on this page to get in touch with our tax professionals to discuss tax planning and opportunities for tax savings
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