The IRS has released its 2025 cost-of-living-adjusted limitation amounts for tax-qualified retirement plans and IRAs. Read on for a summary of the most important updates.

Tax-qualified retirement plans

• Defined benefit plan annual accrual limit – increased from $275,000 to $280,000.
• Defined contribution plan annual addition limit – increased from $69,000 to $70,000. 
• Elective deferrals annual limit – increased from $23,000 to $23,500. 
• Annual compensation limit – increased from $345,000 to $350,000. 
• Compensation threshold for top-heavy plan “key employee” status – increased from $220,000 to $230,000.
• Compensation threshold for “highly compensated employee” status – increased from $155,000 to $160,000. 
• Dollar limit for catch-up contributions for individuals aged 50 or over (except for individuals who qualify for new super catch-up contributions) – remains at $7,500.
  • Dollar limit for new super catch-up contributions for individuals who attain age 60, 61, 62, or 63 in 2025 - $11,250 (regular $7,500 plus additional $3,750). 
• Contribution limit for SIMPLE retirement accounts – increased from $16,000 to $16,500. 
• Annual Section 457(b) plan limit – increased from $23,000 to $23,500.

Traditional IRAs

• Annual maximum deductible amount for traditional IRA contributions – remains at $7,000. 
• Dollar limit for catch-up contributions for individuals aged 50 or over – remains at $1,000.
• Dollar amount for determining deductible amount of traditional IRA contributions 
  • For active participants in an employer retirement plan filing a joint return or as a qualifying widow(er) – increased from $123,000 to $126,000.
  • For all others who are active participants in an employer retirement plan (other than married taxpayers filing separate returns) – increased from $77,000 to $79,000. 
• Adjusted gross income limit for determining deductible amount of a traditional IRA contribution if not an active participant in an employer retirement plan but spouse is an active participant – increased from $230,000 to $236,000.
• Adjusted gross income phase-out range for determining deductible amount for traditional IRA contributions
  • For single individuals and heads of household who are active participants in an employer retirement plan – increased from $77,000-$87,000 to $79,000-$89,000.
  • For married couples filing jointly where the spouse who makes the traditional IRA contribution is an active participant in an employer retirement plan – increased from $123,000-$143,000 to $126,000-$146,000. 
  • For traditional IRA contributions by an individual who is not an active participant in an employer retirement plan but whose spouse is an active participant in an employer retirement plan – increased from $230,000-$240,000 to $236,000-$246,000. 

Roth IRAs

• Adjusted gross income limit for determining maximum Roth IRA contributions 
  • If married and filing jointly or if filing as a qualifying widow(er) – increased from $230,000 to $236,000. 
  • For all others (other than married taxpayers filing separate returns) – increased from $146,000 to $150,000. 
• Adjusted gross income phase-out range for contributions to a Roth IRA 
  • For married couples filing jointly – increased from $230,000-$240,000 to $236,000-$246,000. 
  • For singles and heads of household – increased from $146,000-$161,000 to $150,000-$165,000.