The IRS released the 2025 Cost-of-Living Adjusted Retirement Savings Limitations.

Retirement Plans

The IRS has issued Notice 2024-80, which contains the 2025 cost-of-living increases for qualified retirement plan dollar limitations on benefits and contributions under the Internal Revenue Code (IRC).

• Annual additions under IRC Section (Sec.) 415(c)(1)(A) for defined contribution plans: $70,000
• Annual benefits under IRC Sec. 415(b)(1)(A) for defined benefit plans: $280,000
• Annual deferral limit (402(g) limit) for 401(k), 403(b), and 457(b) plans: $23,500
• Catch-up contributions to 401(k), 403(b), and 457(b) plans: $7,500
• Annual deferral limit for SIMPLE IRA and SIMPLE 401(k) plans: $16,500
• Catch-up contributions for SIMPLE IRA and SIMPLE 401(k) plans: $3,500
• IRC Sec. 401(a)(17) compensation cap: $350,000
• Highly compensated employee (HCE) definition income threshold: $160,000
• Top-heavy determination key employee definition income threshold: $230,000
• SEP plan employee income threshold for benefit eligibility: $750
• Taxable wage base (TWB) increases to $176,100 for 2025 from $168,600; used in some integrated allocation formulas
• Qualifying longevity annuity contract (QLAC) amount excludible from required minimum distribution determinations was increased to $210,000
• The limitation under section 402A(e)(3)(A)(i) concerning pension-linked emergency savings accounts that may be included in certain types of defined contribution plans remains $2,500

IRA Contribution and Taxpayer Contribution Credit Amounts

• Traditional and Roth IRA contributions: $7,000
• Traditional and Roth IRA catch-up contributions: $1,000
• IRA deductibility phase-out for single taxpayers participating in employer plans rises to $79,000 – $89,000 (was $77,000 – $87,000)
• IRA deductibility phase-out for married joint filing taxpayers participating in employer plans rises to $126,000 – $146,000 (was $123,000 – $143,000)
• IRA deductibility phase-out for married with spouse an active participant in an employer plan rises to $236,000 – $246,000 (was $230,000 – $240,000)
• Roth IRA income limitations for determining maximum contribution for married joint filers: phase-out range rises to $236,00 – $246,000 (was $230,000 – $240,000)
• Roth IRA income limitation for determining maximum contribution for single filers and heads-of-households: phase-out range rises to $150,000 – $165,000 (was $146,000 – $161,000)

Taxpayers who make contributions to IRAs or deferral-type employer-sponsored retirement plans of up to $2,000 may be eligible for a special income tax credit (the “saver’s credit”) of 10, 20, or 50 percent of the amount contributed, depending on their income.

For joint filers, the maximum adjusted gross income level for

• the 50 percent tax credit is $47,500;
• the 20 percent tax credit is $51,000; and
• the 10 percent tax credit is $79,000.

For head of household filing status, the maximum adjusted gross income level for

• the 50 percent tax credit is $35,625;
• the 20 percent tax credit is $38,250; and
• the 10 percent tax credit is $59,250.

For all other filing statuses, the maximum adjusted gross income level for

• the 50 percent tax credit is $23,750;
• the 20 percent tax credit is $25,500; and
• the 10 percent tax credit is $39,500.

While the information provided is based on our understanding of current tax laws, and has been gathered from sources believed to be reliable, it cannot be guaranteed. Federal tax laws are complex and subject to change. This information is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.