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Presented by John Fitzgerald
On November 1, 2024, the Internal Revenue Service (IRS) released Notice 2024-80, announcing cost-of-living adjustments that affect contribution limits for retirement plans and retirement accounts in 2025. The table below, though not exhaustive, highlights key changes that retirement plan sponsors should be aware of, along with several limitations that remain unchanged.
The following tables display key limits for 2024 and 2025 from the IRS:
The following tables display key limits for 2024 and 2025 from the IRS:
A note on SIMPLE IRAs: Employers with more than 25 employees can take advantage of these larger limits by increasing the employer contribution formula in the adoption agreement to a 4 percent matching contribution or a 3 percent nonelective contribution.
Employee deferrals to all 401(k) and 403(b) plans must be aggregated for purposes of this limit.
For a participant who separated from service before January 1, 2023, the limitation for defined benefit plans under Section 415(b)(1)(B) can be computed by multiplying the participant’s compensation limitation, as adjusted through 2022, by 1.0833.
401(a) compensation limit, the amount of earned income that can be used to calculate retirement account contributions. All compensation from a single employer (including all members of a controlled group) must be aggregated for purposes of this limit.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Investors should consult a tax preparer, professional tax advisor, and/or a lawyer.
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Fitzgerald Financial Group is located at 727 East Landis Ave, Suite 1, Vineland, New Jersey 08360 and can be reached at 856-692-0022. Securities and advisory services offered through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products and services offered through CES Insurance.
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2025 IRS Benefit Plan Limits
