11.04.2024
Legal News
Benefit and Contribution Limits for 2025
The Commissioner of Internal Revenue announced the 2025 dollar limitations for benefits and contributions that apply to retirement plans. The Social Security Administration increased the Social Security taxable wage base. Increases for health savings accounts were announced this spring. The following chart provides the 2025 limits and the similar limits for 2024.
| Benefit Limits Under the Internal Revenue Code and Social Security | ||
| Description | 2024 Limit | 2025 Limit |
| Compensation Cap under 401(a)(17) | $345,000 | $350,000 |
| Elective Deferral Limit under 402(g)(1) for 401(k) plans, SEPs, and 403(b) plans | $23,000 | $23,500 |
| Applicable Dollar Amount for 457(b) plans | $23,000 | $23,500 |
| Catch-Up Contributions for Individuals Age 50 and Above | $7,500 | $7,500 |
| Catch-Up Contributions for Individuals who Attain Age 60, 61, 62, or 63 in 2025 | N/A | $11,250 |
| Defined Benefit Maximum Annual Accrual | $275,000 | $280,000 |
| Defined Contribution Maximum Annual Addition | $69,000 | $70,000 |
| Highly Compensated Employee Threshold | $155,000 | $160,000 |
| Key Employee in Top-Heavy Plans Threshold | $220,000 | $230,000 |
| ESOP threshold for determining maximum account balance subject to 5-year distribution period | ||
| Regular Limit Additional amount to lengthen 5-year period | $1,380,000 $275,000 | $1,415,000 $280,000 |
| SEP Compensation Threshold for Participation | $750 | $750 |
| SIMPLE IRA Salary Reduction Contribution | $16,000 | $16,500 |
| Catch-Up Contributions for SIMPLE IRAs or SIMPLE 401(k) plans for Individuals Age 50 and Above | $3,500 | $3,500 |
| IRA Maximum Deduction | $7,000 | $7,000 |
| Social Security Taxable Wage Base | $168,600 | $176,100 |
| Health Savings Account Maximum Contributions | ||
| Family Coverage Single Coverage | $8,300 $4,150 | $8,550 $4,300 |
| ACA Affordability Percentage | 8.39% | 9.02% |
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