The Internal Revenue Service announced the 2025 cost-of-living adjustments to the dollar limitations for qualified retirement plans and other benefits, and the Social Security Administration announced its own cost-of-living adjustments for 2025. Most of the dollar limits, including the elective deferral contribution limit for 401(k), 403(b) and 457(b) plans, the annual compensation limit under 401(a)(17) and the maximum annual contribution limit under Code Section 415(c) will increase from 2024 limits. The dollar limit for catch-up contributions (if age 50 or older) remains the same as the 2024 limit and the IRS announced the catch-up contributions for participants who attain age 60, 61, 62 or 63 in 2025.
Retirement Plan Limits
| 2025 Limits | 2024 Limits | |
| 401(k)/403(b)/457(b) Elective Deferrals | $23,500 | $23,000 |
| Catch-Up Contribution (plans other than SIMPLE plans) | $7,500 | $7,500 |
| Catch-Up Contributions for those participants who attain age 60, 61, 62 or 63 in 2025 | $11,250 | N/A |
| SIMPLE Plan Employee Deferrals | $16,500 | $16,000 |
| SIMPLE Plan Catch-Up Contributions | $3,500 | $3,500 |
| SIMPLE Plan Catch-Up Contributions for those participants who attain age 60, 61, 62 or 63 in 2025 | $5,250 | N/A |
| Plan Maximum Annual Contribution – Defined Contribution Plans (Section 415(c)) | $70,000 | $69,000 |
| Maximum Annual Benefit – Defined Benefit Plans (Section 415(b)) | $280,000 | $275,000 |
| Compensation Limit under Section 401(a)(17) | $350,000 | $345,000 |
| Highly Compensated Employee Definition under Section 414(q) | $160,000 | $155,000 |
| Key Employees Officer Compensation for Top-Heavy Plans | $230,000 | $220,000 |
| ESOP limit for determining the maximum account balance subject to the 5-year distribution limit | $1,400,000 | $1,380,000 |
| ESOP dollar amount used for determining the lengthening of the 5-year distribution period | $280,000 | $275,000 |
Health Savings Account and High Deductible Health Plan Limits
Earlier this year, the IRS announced the inflation-adjusted amounts for health savings account and high-deductible health plans for 2025. The HSA limit for self-only/family coverage will increase to $4,300 and $8,550, respectively for 2025. The maximum annual out-of-pocket expense limits for high deductible health plans for self-only and family coverage will increase in 2025.
| 2025 Limits | 2024 Limits | |
| HSA Contribution — Annual Contribution Limit | ||
| Self-Only Coverage | $4,300 | $4,150 |
| Family Coverage | $8,550 | $8,300 |
| Catch-Up Contributions (age 55 or older) | $1,000 | $1,000 |
| High Deductible Health Plan – Minimum Annual Deductible | ||
| Self-Only Coverage | $1,650 | $1,600 |
| Family Coverage | $3,300 | $3,200 |
| High Deductible Health Plan – Maximum Out of Pocket Limit | ||
| Self-Only Coverage | $8.300 | $8,050 |
| Family Coverage | $16,600 | $16,100 |
Health Flexible Spending Accounts
The IRS also released the health flexible spending account contribution rate for 2025. The rate increased to $3,300 for 2025. The carryover amount increased from $640 to $660 for 2025.
| 2025 Limits | 2024 Limits | |
| Health FSA Contribution Limit | $3,300 | $3,200 |
| Carryover Amount | $660 | $640 |
Social Security Wages Base
| 2025 Limit | 2024 Limit | |
| Social Security (FICA) Wage Base | $176,100 | $168,600 |
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