November 5, 2024

Benefit and Contribution Limits for 2025

Allison Carlon, Philip Delano, CPA, Brydon DeWitt, Nona Massengill, Marc Purintun

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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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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations. Attorney Advertising.