Cost of Living Adjustments for IRA and Retirement Planning 2025
On November 1, 2024, IRS Notice (2024-80) included the 2025 cost-of-living adjustments (COLAs) for IRA and retirement plan related dollar limits. Key numbers are shown in the tables below. For additional information see IRS News Release IR-2024-285.
| 2025 Retirement Plan Limits | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| Elective Deferral Limit (401(k), 403(b), 457(b), and SARSEP) | $23,500 | $23,000 | $22,500 |
| Age 50 Catch-up Contribution Limit | $7,500 | $7,500 | $7,500 |
| Age 60-63 Catch-up Limit | $11,250 | N/A | N/A |
| Annual Defined Benefit Limit | $280,000 | $275,000 | $265,000 |
| Annual Defined Contribution Limit | $70,000 | $69,000 | $66,000 |
| Annual Compensation Limit | $350,000 | $345,000 | $330,000 |
| Highly Compensated Employee Dollar Threshold | $160,000 | $155,000 | $150,000 |
| SIMPLE Standard Contribution Limit | $16,500 | $16,000 | $15,500 |
| SIMPLE Small Employer Special Contribution Limit | $17,600* | $17,600 | N/A |
| SIMPLE Standard Age-50 Catch-up Contribution Limit | $3,500 | $3,500 | $3,500 |
| SIMPLE Small Employer Special Age-50 Catch-up Contribution Limit | $3,850* | $3,850 | N/A |
| SIMPLE Age 60-63 Catch-up Contribution Limit | $5,250 | N/A | N/A |
| SEP Coverage Minimum Comp | $750 | $750 | $750 |
| SEP Compensation Limit | $350,000 | $345,000 | $330,000 |
| Top-heavy Key Employee Comp | $230,000 | $220,000 | $215,000 |
| Social Security Taxable Wage Base | $176,100 | $168,600 | $160,200 |
| ESOP Maximum Amount Subject to a 5-year Distribution Period | $1,415,000 | $1,380,000 | $1,330,000 |
| ESOP Maximum Amount for Lengthening of the 5-year Period | $280,000 | $275,000 | $265,000 |
| Source: Notice 2024-80 *For SIMPLE plans with 25 or fewer employees and SIMPLE plans with 26-100 participants if 4% match or 3% nonelective employer contribution provided. |
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| 2025 IRA Limits | |||
|---|---|---|---|
| 2025 | 2024 | 2023 | |
| IRA Contribution Limit | $7,000 | $7,000 | $6,500 |
| IRA Catch-up Contributions | $1,000 | $1,000 | $1,000 |
| Joint Return Covered by Workplace Retirement Plan | $126,000-$146,000 | $123,000-$143,000 | $116,000-$136,000 |
| Single or Head of Household Covered by Workplace Retirement Plan | $79,000-$89,000 | $77,000-$87,000 | $73,000-$83,000 |
| Joint Return Spouse Not Covered by Workplace Retirement Plan | $236,000-$246,000 | $230,000-$240,000 | $218,000-$228,000 |
| Married Filing Separately Covered by Workplace Retirement Plan | $0-$10,000 | $0-$10,000 | $0-$10,000 |
| Roth IRA Joint Return | $236,000-$246,000 | $230,000-$240,000 | $218,000-$228,000 |
| Roth IRA Single or Head of Household | $150,000-$165,000 | $146,000-$161,000 | $138,000-$153,000 |
| Roth IRA Married Filing Separately | $0-$10,000 | $0-$10,000 | $0-$10,000 |
| Source: Notice 2024-80 | |||
Sources:
IRS (2024, November 1). 2025 Amounts Relating to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living. https://www.irs.gov/pub/irs-drop/n-24-80.pdf
(2024, November 1). 401(k) limit increases to $23,500 for 2025, IRA limit remains $7,000. IRS. https://www.irs.gov/newsroom/401k-limit-increases-to-23500-for-2025-ira-limit-remains-7000