2025 IRS Limits

The IRS announced new contribution and benefit limits for 2025, which are contained in Notice 2024-80, released on Nov. 1, 2024.  

Most significantly, the amount individuals can contribute to their 401(k) plans (as well as 403(b), most 457 plans, and the Thrift Savings Plan) in 2025 has increased to $23,500, up from $23,000 for 2024.

Additionally, the catch-up contribution limit for employees aged 50 and over who participate in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan remains $7,500 for 2025.

Therefore, participants in 401(k), 403(b), and most 457 plans, as well as the federal government’s Thrift Savings Plan who are 50 and older can contribute up to $31,000, starting in 2025. The catch-up contribution limit for employees 50 and over who participate in SIMPLE plans remains $3,500 for 2025. 

Additional Highlights for 2025

IRAs. The limit on annual contributions to an IRA remains $7,000, and while the IRA catch up contribution limit for individuals aged 50 and over was amended under the SECURE 2.0 Act (SECURE 2.0) to include an annual cost of living adjustment, it also holds steady at $1,000 for 2025.

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Section 415. Effective Jan. 1, 2025, the limitation on the annual benefit under a defined benefit plan under Internal Revenue Code (IRC) Section 415(b)(1)(A) increases to $280,000 from the 2024 level of $275,000. The limitation for DC plans under IRC Section 415(c)(1)(A) increases to $70,000 for 2025 from the 2024 level of $69,000.

The IRC provides that various other dollar amounts are to be adjusted at the same time, and in the same manner, as the dollar limitation of IRC Section 415(b)(1)(A). After taking into account the applicable rounding rules, the amounts for 2025 are as follows:

• The limitation under IRC Section 402(g)(1) on the exclusion for elective deferrals described in IRC Section 402(g)(3) is increased to $23,500 from the 2024 level of $23,000.
• The annual compensation limit under IRC Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) is increased to $350,000 for 2025, up from the 2024 level of $345,000.
• The dollar limitation under IRC Section 416(i)(1)(A)(i) concerning the definition of “key employee” in a top-heavy plan is increased from will be $230,000 for 2025, up from 2024’s $220,000.
• The dollar amount under IRC Section 409(o)(1)(C)(ii) for determining the maximum account balance in an employee stock ownership plan subject to a 5-year distribution period is increased to $1,415,000 for 2025, up from the 2024 level of $1,380,000, while the dollar amount used to determine the lengthening of the 5-year distribution period is increased to $280,000 for 2025, up from the 2024 level of $275,000.
• The limitation used in the definition of “highly compensated employee” under IRC Section 414(q)(1)(B) will be $160,000 for 2025, up from the 2024 level of $155,000.
• The compensation amount under IRC Section 408(k)(2)(C) regarding simplified employee pensions remains $750 for 2025.
• The limitation under IRC Section 408(p)(2)(E) regarding SIMPLE retirement accounts is increased to $16,500 for 2025, up from the 2024 level of $16,000.

Saver’s Credit. The income limit for the Saver’s Credit (also known as the Retirement Savings Contributions Credit) for low- and moderate-income workers for 2025 is:

• $79,000 for married couples filing jointly, up from $76,500;
• $59,250 for heads of household, up from $57,375; and
• $39,500 for singles and married individuals filing separately, up from $38,250.

SIMPLE retirement accounts. The amount individuals can contribute to their SIMPLE retirement accounts in 2025 is increased to $16,500, up from $16,000 for 2024.

Additional Changes Under SECURE 2.0. Additional changes made under SECURE 2.0 are as follows:

• The limitation on premiums paid with respect to a qualifying longevity annuity contract was set at $200,000. For 2025, this limitation remains $210,000.
• Added an adjustment to the deductible limit on charitable distributions. For 2025, this limitation is increased to $108,000, up from the 2024 level of $105,000.
• A deductible limit for a one-time election to treat a distribution from an individual retirement account made directly by the trustee to a split-interest entity was added. For 2025, this limitation is increased to $54,000, up from the 2024 level of $53,000.