The Internal Revenue Service announced cost-of-living adjustments affecting certain dollar limitations for pension plans and other retirement-related limitations for 2025 in Notice 2024-80.
The following chart details 2025 retirement plan dollar limitation cost-of-living adjustments:
| Limitation Description | 2024 | 2025 |
| Maximum annual benefit under a defined benefit plan under IRC Section 415(b)(1)(A) | $275,000 | $280,000 |
| Maximum annual contribution to an individual’s defined contribution plan account under IRC Section 415(c) | $69,000
(plus catch-up) |
$70,000
(plus catch-up) |
| Elective contribution limit under IRC Section 402(g)(1) (for 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan) | $23,000 | $23,500 |
| Maximum amount of annual compensation that may be taken into account for determining benefits or contributions to retirement plans under IRC Sections 401(a)(17), 404(l), 408(k)(3)(C), and 408(k)(6)(D)(ii) | $345,000 | $350,000 |
| Dollar amount for determining maximum account balance in an employee stock ownership plan subject to a 5-year distribution period under IRC Section 409(o)(1)(C)(ii) | $1,380,000 | $1,415,000 |
| Dollar amount used for determining the lengthening of the 5-year distribution period in an employee stock ownership plan under IRC Section 409(o)(1)(C)(ii) | $275,000 | $280,000 |
| Amount of compensation to be a “key” employee under a “top-heavy” plan under IRC Section 416(i)(1)(A)(i) | $220,000 | $230,000 |
| Dollar limitation used in the definition of “highly compensated employee” under IRC Section 414(q)(1)(B) | $155,000 | $160,000 |
| Limitation under IRC Section 408(p)(2)(E) for salary deferral contributions to SIMPLE retirement accounts | $16,000 | $16,500 |
| Limitation concerning the qualified gratuitous transfer of qualified employer securities to an employee stock ownership plan under IRC Section 664(g)(7) | $60,000 | $60,000 (no adjustment) |
| Catch-up contribution limit for employees who are age 50 and over who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan | $7,500 | $7,500 (no adjustment)* |
| Minimum compensation amount under IRC Section 408(k)(2)(C) for simplified employee pensions (SEPs) | $750 | $750 (no adjustment) |
| IRA contribution limit | $7,000 | $7,000 (no adjustment) |
| Wage Base For Social Security Tax | $168,600 | $176,100** |
*SECURE 2.0 provided that, beginning in 2025, plans may permit the availability of increased catch-up contributions for individuals age 60 to 63. For 2025, the increased catch-up contribution amount is $11,250.
**October, 10, 2024 SSA announcement
Note: The additional catch-up contribution limit to an IRA for individuals age 50 and over remains $1,000.
Please click here for more details on the changes made by IRS Notice 2024-80.