|
Elective deferral limits |
2024 | 2025 |
|---|---|---|
| 401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs1 (includes Roth contributions) | Lesser of $23,000 or 100% of compensation ($30,500 if age 50 or older)2 | Lesser of $23,500 or 100% of compensation ($31,000 if age 50 or older; $34,750 if age 60 to 63)2 |
| SIMPLE 401(k) plans and SIMPLE IRA plans1 | Lesser of $16,000 or 100% of compensation ($19,500 if age 50 or older) | Lesser of $16,500 or 100% of compensation ($20,000 if age 50 or older; $21,750 if age 60 to 63) |
| SIMPLE 401(k) plans and SIMPLE IRA plans with 25 or fewer employees (or those that elect these higher limits)1 | Lesser of $17,600 or 100% of compensation ($21,450 if age 50 or older) | Lesser of $17,600 or 100% of compensation ($21,450 if age 50 or older; $22,850 if age 60 to 63) |
| Starter 401(k) plans and safe-harbor 403(b) plans | Between 3% and 15% of annual compensation up to a maximum of $6,000 ($7,000 if age 50 or older) | Between 3% and 15% of annual compensation up to a maximum of $6,000 ($7,000 if age 50 or older) |
|
IRA contribution limits |
2024 | 2025 |
|---|---|---|
| Traditional and Roth IRAs | Lesser of $7,000 or 100% of earned income ($8,000 if age 50 or older) | Lesser of $7,000 or 100% of earned income ($8,000 if age 50 or older) |
|
Defined benefit plan annual benefit limits |
2024 | 2025 |
|---|---|---|
| Annual benefit limit per participant | Lesser of $275,000 or 100% of average compensation for highest three consecutive years | Lesser of $280,000 or 100% of average compensation for highest three consecutive years |
|
Defined contribution plan limits [qualified plans, 403(b) plans, and SEP plans] |
2024 | 2025 |
|---|---|---|
| Annual addition limit per participant (employer contributions; employee pre-tax, after-tax, and Roth contributions; and forfeitures) | Lesser of $69,000 or 100% (25% for SEP) of participant’s compensation | Lesser of $70,000 or 100% (25% for SEP) of participant’s compensation |
| Pension-linked emergency savings accounts (maximum amount attributable to employee deferrals) | $2,500 | $2,500 |
| Retirement plan compensation limits | 2024 | 2025 |
|---|---|---|
| Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans/SEPs) |
$345,000 |
$350,000 |
|
Compensation threshold used to determine a highly compensated employee |
$155,000 (when 2024 is the look-back year) |
$160,000 (when 2025 is the look-back year) |
|
Compensation threshold used to determine a key employee in a top-heavy plan |
$1 for more-than-5% owners $220,000 for officers $150,000 for more-than-1% owners |
$1 for more-than-5% owners $230,000 for officers $150,000 for more-than-1% owners |
|
Compensation threshold used to determine a qualifying employee under a SIMPLE plan |
$5,000 |
$5,000 |
|
Compensation threshold used to determine a qualifying employee under a SEP plan |
$750 |
$750 |
| Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers: | 2024 | 2025 |
|---|---|---|
|
1. Covered by an employer-sponsored plan and filing as: |
|
|
|
Single/Head of household |
$77,000 – $87,000 |
$79,000 – $89,000 |
|
Married filing jointly |
$123,000 – $143,000 |
$126,000 – $146,000 |
|
Married filing separately |
$0 – $10,000 |
$0 – $10,000 |
|
2. Not covered by an employer-sponsored retirement plan, but filing joint return with a spouse who is covered by a plan |
$230,000 – $240,000 |
$236,000 – $246,000 |
| Income phase-out range for determining ability to fund a Roth IRA for taxpayers filing as: | 2024 | 2025 |
|---|---|---|
|
|
||
|
Single/Head of household |
$146,000 – $161,000 |
$150,000 – $165,000 |
|
Married filing jointly |
$230,000 – $240,000 |
$236,000 – $246,000 |
|
Married filing separately |
$0 – $10,000 |
$0 – $10,000 |
This material is for general information only and is not intended to provide specific advice or recommendations for any individual. There is no assurance that the views or strategies discussed are suitable for all investors or will yield positive outcomes. CDs are FDIC Insured to specific limits and offer a fixed rate of return if held to maturity, whereas investing in securities is subject to market risk including loss of principal. This material was prepared by LPL Financial.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing. All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and cannot be invested into directly.
The information provided is not intended to be a substitute for specific individualized tax planning or legal advice. We suggest that you consult with a qualified tax or legal advisor.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
Gregory Armstrong and Joe Breslin are Registered Representatives with and Securities are offered through LPL Financial, member FINRA/SIPC Investment advice offered through ADE, LLC, a registered investment advisor. Armstrong Dixon and ADE, LLC are separate entities from LPL Financial.
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