BizTech Law Blog
This blog has been updated since December 4, 2023. The data below is current.
The IRS has announced the 2025 cost-of-living adjustments for retirement plan and health and welfare benefit plan limitations. The charts below set forth the applicable limitations.
Retirement Plans
Similar to previous years, the IRS has again increased the limits for several retirement plan limits for 2025. The rows below represent some of the important changes. The changed limitations are between the 2024 limits and the 2025 limits.
|
Retirement Plan Limitation |
2024 Limit |
2025 Limits |
|
401(k) and 403(b) Employee Contribution Limit |
$23,000 |
$23,500 |
|
"Catch-Up Contribution" Limit (age 50 and older) |
$7,500 |
$7,500 |
|
Defined Contribution Maximum Contribution |
$69,000 (plus “Catch-Up”) |
$70,000 (plus “Catch-Up”) |
|
Defined Benefit Annual Benefit Limit |
$275,000 |
$280,000 |
|
Highly Compensated Employee Compensation |
$155,000 |
$160,000 |
|
Top-Heavy Key Employee Officer Dollar Limit |
$220,000 |
$230,000 |
|
Annual Compensation Limit |
$345,000 |
$350,000 |
|
457(b) Plan Contribution Limit |
$23,000 |
$23,500 |
|
Social Security Taxable Wage Base |
$168,600 |
$176,100 |
In addition to the typical catch-up contribution limit that is permitted for individuals who are 50 years or older, the IRS announced limits for the “super” catch-up that was adopted as part of SECURE 2.0. Under the “super” catch-up rules, an individual between age 60 and 63 may contribute up to $11,250 (instead of $7,500). This additional catch-up limit is permitted for 401(k) plan, 457(b) plans, and 403(b) plans.
A complete explanation of all changes can be found in Notice 2024-80.
Health and Welfare Benefit Plans
The changes in limitations that apply to health and welfare plans have increased slightly for 2025. The following chart outlines the changes to these limits, but a full explanation can be found in Notice 2024-40.
|
Health and Welfare Benefit Plan Limitation |
2024 Limit |
2025 Limit |
|
Health Flexible Spending Account (FSA) Contribution Limit |
$3,200 |
$3,300 |
|
Health Savings Account (HSA) Contribution Limits - Family - Single - Catch-Up Limit (age 55 and older) |
$4,150 $1,000 |
$4,300 $1,000 |
|
HSA Annual Deduction Minimums - Family - Single |
$1,600 |
$1,650 |
|
HSA Out-of-Pocket Maximums - Family - Single |
$8,050 |
$8,300 |
|
Qualified Transportation Fringe Benefit Monthly Limits - Qualified Parking - Transit Pass/Vanpooling |
$315 |
$325 |
The dependent care assistance limit remains at $5,000 and has not changed for a number of years.
If you have question related to these limits or how they affect the administration of your plan, please contact one of the authors of this article.
- Amanda Dernovshek…517.371.8259…adernovshek@fosterswift.com
- Julie Hamlet…616.796.2515…jhamlet@fosterswift.com
- Mindi Johnson…616.726.2252…mjohnson@fosterswift.com
ShareholderAmanda Dernovshek is an employee benefits attorney in our Business and Tax group. Her practice focuses on issues related to employee stock ownership plans (ESOPs), non-qualified deferred compensation plans, qualified ...
ShareholderJulie is an experienced attorney with over a decade of practice focused on employee benefits and retirement plan compliance. She advises employers, plan sponsors, and fiduciaries on the design, operation, and governance of ...
ShareholderWith a business-minded approach, and service-oriented delivery, Mindi helps clients navigate challenges and solve problems in the areas of employee benefits law and health care law. Mindi has spoken and written extensively on ...
