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If your plan specifies that salary deferrals be based on a participant’s first $280,000 of compensation, then you must stop allowing Mary to make salary deferrals when her year-to-date compensation reaches $280,000, even though she hasn’t reached the annual $19,000 limit on salary deferrals and must base the employer match on her actual ...

For 2025, the IRS limits the amount of compensation eligible for 401(k) contributions to $350,000. That's an increase from the 2024 limit of $345,000. The IRS adjusts this limit every year based ...

Here are the 2025 limits that are most relevant to 401(k) plans: Annual Additions. The limit on annual additions (i.e., contributions) to 401(k) and other defined contribution plans will increase to $70,000 (up from $69,000). Code § 415(c)(1)(A). Compensation. The annual limit on compensation that can be taken into account for contributions ...

2025 Amounts Relating . to Retirement Plans and IRAs, as Adjusted for Changes in Cost-of-Living ... compensation plans of state and local governments and tax-exempt ... an applicable employer plan other than a plan described in section 401(k)(11) or section 408(p) that applies for individuals who attain age 60, 61, 62, or 63 in ...

401(k) contribution limits for 2025 The 401(k) contribution limit for 2025 is $23,500 for employee salary deferrals, and $70,000 for the combined employee and employer contributions. If you're age 50 to 59 or 64 or older, you're eligible for an additional $7,500 in catch-up contributions.

For the 2026 plan year, an employee who earns more than $160,000 in 2025 is an HCE. Source: IRS Notice 2024-80 View: IRS Raises 401(k) Contribution Limit for 2025

For 2025, this higher catch-up contribution limit is $11,250 instead of $7,500. The income ranges for determining eligibility to make deductible contributions to traditional Individual Retirement Arrangements (IRAs), to contribute to Roth IRAs and to claim the Saver's Credit all increased for 2025.

Understand 2025 401(k) contribution limits, including updates for employees, employers, and IRAs. ... There are other limits that apply to 401(k) plans, such as the annual compensation limit and the employer deduction limit. ... from a survey of 44 US-based individuals aged 59–63 who could be eligible for this benefit in 2025. Guideline was ...

2025 IRS updates to benefit contribution Limits & Thresholds. Each year, the IRS adjusts key tax thresholds and benefit limits to account for inflation, and 2025 is no exception The following table provides a side-by-side comparison of the 2025 IRS thresholds and limits versus those from 2024, highlighting updates that could impact your financial planning and tax strategies.

And the Social Security Administration independently announced that the maximum amount of wages subject to Social Security taxes for 2025 will increase from $168,600 to $176,100. Please contact any of the attorneys in our Employee Benefits and Executive Compensation Group if you have any questions regarding this alert.

The employee contribution limit for 401(k) plans in 2025 has increased to $23,500, up from $23,000 for 2024. Other key limits include the following: ... The annual compensation limit (applicable to many retirement plans) ... The income ranges for determining eligibility to make deductible contributions to traditional IRAs, contribute to Roth ...

The annual compensation limitation under section 401(a)(17) for eligible participants in certain governmental plans that, under the plan as in effect on July 1, 1993, allowed cost-of-living adjustments to the compensation limitation under the plan under section 401(a)(17) to be taken into account, is increased from $505,000 to $520,000.

A plan participant may defer up to $23,500 from their salary into a defined contribution retirement plan in 2025 (excluding catch-up contributions), an increase of $500. ... contribution to an individual’s account in a defined contribution plan (a money-purchase, profit sharing and/or 401(k) plan) cannot exceed the lesser of 100% of the ...

Maximum contribution limits for 401(k) plans are rising by $500 for many workers in 2025. 2 Workers age 50 and older can make additional catch-up contributions, with those in the 60 to 63 age group eligible for even higher limits. 1 2 Many employers will now be required to enroll their workers automatically in their 401(k) plan, although workers can still opt out. 1

Endnotes. 1 For a participant who separated from service before January 1, 2025, the participant's limitation under a defined benefit plan under IRC Section 415(b)(1)(B) is computed by multiplying the participant's compensation limitation, as adjusted through 2024, by 1.0262.. 2 For eligible participants in certain governmental plans that allow cost of living adjustments to the compensation ...

For 2025, the standard 401(k) contribution limit increased to $23,500, up $500 from the 2024 limit of $23,000. This adjustment applies to 401(k) plans, as well as 403(b) plans, most 457 plans and the federal government's Thrift Savings Plan. While this may seem like a modest increase, it represents a continued trend of annual adjustments aimed ...

Updated 401(k) Contribution Limits for 2025. The IRS raised the 401(k) contribution limit for 2025 to $23,500, which is up from $23,000 in 2024. These limits also apply to 403(b) and 457 plans. For individuals aged 50 and older, the standard catch-up contribution limit remains unchanged at $7,500. However, those between the ages of 60 and 63 ...

The dollar limit for employee 401(k) elective deferral contributions is increased from $23,000 in 2024 to $23,500 in 2025. Plan Compensation. The maximum amount of compensation that may be taken into account for qualified plan (including 401(k) plan) purposes is increased from $345,000 in 2024 to $350,000 in 2025. Annual Additions.

Annual Limit on Age 60-63 401(k)/403(b) Catch-up Contributions: $11,250 (Not in effect prior to 2025) Annual Compensation Limit. $350,000. $345,000. Annual Contribution Limit for Defined Contribution Plans. $70,000. $69,000. Annual Benefit Limit for Defined Benefit Plans. $280,000. $275,000. Prior Year Compensation Amount for Determining Highly ...