Individuals can contribute more to their retirement accounts in 2025, as the IRS has increased the contribution limit for a participant’s 401k and 403b plans, the Thrift Savings Plan for federal employees, and most 457 plans. Details on the new limits and other cost-of-living adjustments for retirement plans were released in IRS Notice 2024-80.
As a result of the new federal retirement law provisions in SECURE 2.0, effective in 2025 employees who are 60-63 years old and have workplace retirement plans can make additional catch-up contributions of up to $11,250. This is in addition to the regular retirement plan contribution of $23,500, so, employees aged 60-63 can contribute a total of $34,750 in 2025. Catch-up contributions for workers aged 50-59 and 64+ remain unchanged at $7,500, for an annual total contribution limit of $31,000.
Many other contribution amounts and retirement-related thresholds have increased. Below is a short list. We encourage you to visit our website at boutwellfay.com for a more complete list of annual amounts. Coming soon will be the limits and changes in connection with Health and Welfare plans.
2025 Retirement Plan Annual Limits
Maximum Elective Deferrals for 401k, 403b*, most 457 plans - $23,500
Catch-Up Contributions Limit for 401k, 403b, and 457* plans (Ages 50-59 and 64+) - $7,500 (no change)
Catch-Up Contributions Limit for 401k, 403b, and 457 plans (Ages 60-63) - $11,250
SIMPLE Plan Maximum Deferral Limit* - $16,500
SIMPLE Plan Catch-up Contribution Limit* (Ages 50-59 and 64+) - $3,500 (no change)
SIMPLE Plan Catch-up Contribution Limit (Ages 60-63) - $5,250
Total Annual IRA Contribution Limit - $7,000 (no change)
Annual Compensation Limit $350,000
Key Employee for Top-Heavy Plan Threshold - $230,000
Highly Compensated Employee Threshold - $160,000
Defined Benefit Plan Annual Benefit Limit - $280,000
Defined Contribution Plan Annual Limit - $70,000
Social Security Taxable Wage Base Rate - $176,100
More information and a more comprehensive list for 2025 can be found at the following links:
If you have any questions about the new guidance, please contact a Boutwell Fay attorney at attorneys@boutwellfay.com.
*Certain exceptions apply. See IRS Notice 2024-80 for further details.
Boutwell Fay is a leading law firm specializing in employee benefits and ERISA.
With a focus on providing customized solutions and exceptional client service, we help businesses navigate the complexities of employee benefit plans. Our team of experienced attorneys is dedicated to delivering results that exceed our clients' expectations.
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