2025 Benefit and Contribution Limits

With the IRS’s newly announced 2025 contribution limits, employees and business owners alike have more potential than ever to maximize retirement savings through 401(k) plans.

Thanks to the SECURE 2.0 Act, an enhanced catch-up contribution limit has been introduced for participants between the ages of 60 and 63. This provision offers added incentives to save more aggressively, especially in light of rising living expenses.

Below is a breakdown of the most notable updates as they pertain directly to Defined Contribution and Defined Benefit Plans.

(Increased limits from 2024 are shown below in bold)

Important Annual Limits	2025	2024
Maximum Employee Deferral Limit¹ (401(k), 403(b), & 457)	$23,500	$23,000
Employee Catch-Up Contribution² (401(k), 403(b) & 457 - if age 50 or older by year-end)	$7,500	$7,500
Defined Contribution Maximum Limit³ (employee + employer contributions)	$70,000	$69,000
Defined Contribution Maximum Limit³ (employee + employer contributions, if age 50 or older by year-end)	$77,500	$76,500
Employee Compensation Limit	$350,000	$345,000
Key Employees Compensation Threshold	$230,000	$220,000
Highly Compensated Employees Threshold⁴	$160,000	$155,000
Social Security Taxable wage Base	$176,100	$168,600
IRA Contribution Limit	$7,000	$7,000
IRA Catch-Up Contribution Limit	$1,000	$1,000
Defined Benefit Dollar Limit	$280,000	$275,000
SECURE 2.0 Act: Higher Employee Catch-up (401(k), if age 60-63)	$11,250	NEW

¹The $23,500 elective deferral limit is also known as the 402(g) limit, after the relevant tax code section

²The $7,500 catch-up contribution limit for participants aged 50 or older applies from the start of the year in which the employee is turning 50

³Total contributions from all sources may not exceed 100% of a participant’s total compensation

⁴For the 2025 plan year, an employee who earns more than $155,000 in 2024 is an HCE. For the 2026 plan year, an employee who earns more than $160,000 in 2025 is an HCE.

Source: IRS Notice 2024-80