Mercer projects 2025 retirement plan limits
October 11, 2024
Mercer projects that nearly every key Internal Revenue Code (IRC) limit for qualified retirement plans will rise from 2024 to 2025. Only the catch-up limit for employees not ages 60-63 will remain the same. The 2025 limits will reflect increases in the Consumer Price Index for All Urban Consumers (CPI-U) from the third quarter of 2023 to the third quarter of 2024. This updated article reflects the final CPI-U value for September. IRS usually announces official limits for the coming year in late October or early November.
The table below shows Mercer’s projections of the 2025 limits compared with the actual 2024 amounts. The table also includes the new, higher catch-up contribution limits applicable to participants ages 60‒63 as implemented by the SECURE 2.0 Act of 2022 (Div. T of Pub. L. No. 117-328). These limits first take effect for 2025 tax years.
| IRC retirement plan limit | Projected 2025 |
2024 |
|---|---|---|
| 401(k), 403(b) and eligible 457 plan elective deferrals (and designated Roth contributions) | $23,500 |
23,000 |
| 414(v)(2)(B)(i) catch-up contributions (plans other than SIMPLE plans) | ||
| For employees ages 60‒63 | 11,250 | 7,500 |
| For all other employees | 7,500 | 7,500 |
| 415(b) defined benefit plan annuity | 280,000 | 275,000 |
| 415(c) defined contribution plan annual addition | 70,000 | 69,000 |
| 401(a)(17) and 408(k)(3)(C) compensation | 350,000 | 345,000 |
| 414(q)(1)(B) highly compensated employee (HCE) and 414(q)(1)(C) top-paid group* | 160,000 | 155,000 |
| 416(i)(1)(A)(i) officer compensation for top-heavy plan key employee | 230,000 | 220,000 |
Related resources
- User’s guide to SECURE 2.0 (regularly updated)
- Summary of 2024 benefit-related cost-of-living adjustments (Feb. 8, 2024)
- Quick benefit facts for 2024 (Jan. 17, 2024)
- Lawmakers release SECURE 2.0 corrections bill for beta testing (Jan. 12, 2024)
- Quick benefit facts and COLA resources for benefit plans (2020–2024)