On November 1, 2024 the Internal Revenue Service announced the cost-of-living adjustments for the various qualified retirement plan limits. Almost all of the limits shown below have increased from last year.
Qualified Plan Limit | Cost-of-Living Adjustments |
401(k) and 403(b) elective deferral limit |
2024 – $23,000 2025 – $23,500 |
$200,000 compensation limit |
2024 – $345,000 2025 – $350,000 |
$160,000 defined benefit limit |
2024 – $275,000 2025 – $280,000 |
$40,000 defined contribution limit |
2024 – $69,000 2025 – $70,000 |
$80,000 definition of highly compensated employee |
2024 – $155, 000 2025 – $160,000 |
SIMPLE IRA deferral limit |
2024 – $16,000 2025 – $16,500 |
Code Section 457 deferred compensation plan deferral limit |
2024 – $23,000 2025 – $23,500 |
Code Section 414(v) catch-up contribution limit for employee deferrals |
2024 – $7,500 2025 – $7,500 |
Code Section 414(v) increased catch-up contribution limit for employee deferrals (age 61 – 63 in 2025) | 2025 – $11,250 |
All of the above are plan year limits (i.e., for the plan year which begins in 2025), with the exception of the Code Section 401(k) and Code Section 403(b) elective deferral limit, which is a calendar year limitation.
In addition, the Department of Health and Human Services has set the maximum taxable wages for the OASDI portion of the social security tax at $176,100 for 2025, which is an increase from the 2024 limit of $168,600.
This document provides information of a general nature regarding legislative or other legal developments, and is based on the state of the law at the time of the original publication of this article. None of the information contained herein is intended as legal advice or opinion relative to specific matters, facts, situations, or issues, and additional facts and information or future developments may affect the subjects addressed. You should not act upon the information in this document without discussing your specific situation with legal counsel.
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