Mercer projects 2025 retirement plan limits 

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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

IRC retirement plan limit

401(k), 403(b) and eligible 457 plan elective deferrals (and designated Roth contributions)

Projected
2025

$23,500

2024

23,000

IRC retirement plan limit

414(v)(2)(B)(i) catch-up contributions (plans other than SIMPLE plans)

Projected
2025

 

2024

 

IRC retirement plan limit

For employees ages 60‒63

Projected
2025

11,250

2024

7,500

IRC retirement plan limit

For all other employees

Projected
2025

7,500

2024

7,500

IRC retirement plan limit

415(b) defined benefit plan annuity

Projected
2025

280,000

2024

275,000

IRC retirement plan limit

415(c) defined contribution plan annual addition

Projected
2025

70,000

2024

69,000

IRC retirement plan limit

401(a)(17) and 408(k)(3)(C) compensation

Projected
2025

350,000

2024

345,000

IRC retirement plan limit

414(q)(1)(B) highly compensated employee (HCE) and 414(q)(1)(C) top-paid group*

Projected
2025

160,000

2024

155,000

IRC retirement plan limit

416(i)(1)(A)(i) officer compensation for top-heavy plan key employee

Projected
2025

230,000

2024

220,000
*The HCE limit shown for a year is applied to compensation for that plan year to determine if an employee is an HCE for the following plan year, e.g., an employee with 2025 plan year compensation greater than $160,000 may be an HCE for the 2026 plan year.

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