The amount you and your employees can save for retirement is going up slightly in 2025
How Much Can You and Your Employees Contribute to Retirement Plans in 2025? The IRS recently released Notice 2024-80, announcing cost-of-living adjustments that apply to contribution limits for 401(k)s, other qualified retirement plans, and IRAs for 2025. With inflation moderating, increases for 2025 are more modest than in recent years.
401(k), 403(b), 457, and Thrift Savings Plan (TSP) Limits
For 2025, the employee contribution limit for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is $23,500 (up from $23,000 in 2024).
The catch-up contribution limit for individuals age 50 or older will remain $7,500.
For most plan participants age 50 or older, the total allowable contribution is $31,000 for 2025.
Special Note on Age 60–63 Catch-Up Contributions:
The SECURE 2.0 Act provides for an increased “super” catch-up contribution for participants ages 60, 61, 62, or 63.
For 401(k), 403(b), 457, and TSP, the special catch-up for this age group is projected to be $11,250, resulting in a maximum total of $34,750 for 2025.
Important: This higher amount is based on a statutory formula and its exact implementation may depend on IRS or legislative updates and plan-specific adoption. Confirm with your plan administrator closer to 2025 before relying on this projected amount.
SEP and Defined Contribution Plans
The total contribution limit for defined contribution plans, including SEP IRAs, rises to $70,000 in 2025 (up from $69,000).
The minimum compensation required to participate in a SEP plan remains $750.
SIMPLE Retirement Accounts
SIMPLE IRA and SIMPLE 401(k) employee deferral limit increases to $16,500 in 2025 (up from $16,000).
The age-50 catch-up contribution remains at $3,500.
For employees ages 60–63, a special catch-up contribution under SECURE 2.0 is projected at $5,250 in 2025, for a total potential contribution of $21,750. As with 401(k) plans, this higher catch-up figure is a projection and should be confirmed with your provider or the IRS as 2025 approaches.
Other Key Limits for 2025
The annual benefit limit under a defined benefit pension increases to $280,000.
The compensation limit for a “key employee” in a top-heavy plan rises to $230,000.
The threshold for a “highly compensated employee” increases to $160,000.
IRAs
The IRA contribution limit remains $7,000 for 2025.
The catch-up contribution for those age 50 or over is $1,000 and will not increase this year.
Plan Ahead
These updated contribution limits allow for significant retirement savings opportunities in 2025. For any special catch-up contributions, especially if you’re between the ages of 60 and 63, check with your plan sponsor or administrator for plan-specific details. Contact us at Satty if you have questions about your tax-advantaged retirement plan or want to explore other retirement plan options.
© 2025