In Notice 2024-80, the IRS has issued its 2025 inflation-adjusted contribution amounts for retirement plans. Many retirement-plan-related limits will increase for 2025 — but less than in prior years. So, depending on the type of plan you have, you may have limited opportunities to increase your retirement savings.
| Type Of Limitation | 2024 Limit | 2025 Limit |
| Elective deferrals to 401(k), 403(b), 457(b)(2), and 457(c)(1) plans | $23,000 | $23,500 |
| Annual benefit limit for defined benefit plans | $275,000 | $280,000 |
| Contributions to defined contribution plans | $69,000 | $70,000 |
| Contributions to SIMPLEs | $16,000 | $16,500 |
| Contributions to traditional and Roth IRAs | $7,000 | $7,000 |
| Catch-up contributions to 401(k), 403(b), and 457 plans for those age 50 or older | $7,500 | $7,500 |
| Catch-up contributions to 401(k), 403(b), and 457 plans for those age 60, 61, 62, or 63* | N/A | $11,250 |
| Catch-up contributions to SIMPLE plans for those age 50 or older | $3,500 | $3,500 |
| Catch-up contributions to SIMPLE plans for those age 60, 61, 62, or 63* | N/A | $5,250 |
| Catch-up contributions to IRAs for those age 50 or older | $1,000 | $1,000 |
| Compensation for benefit purposes for qualified plans and SEPs | $345,000 | $350,000 |
| Minimum compensation for SEP coverage | $750 | $750 |
| Highly compensated employee threshold | $155,000 | $160,000 |
* A change that takes effect in 2025 under SECURE 2.0
Your modified adjusted gross income (MAGI) may reduce or even eliminate your ability to take advantage of IRAs. Fortunately, IRA-related MAGI phaseout range limits all will increase for 2025:
Traditional IRAs. MAGI phaseout ranges apply to the deductibility of contributions if a taxpayer (or their spouse) participates in an employer-sponsored retirement plan:
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- For married taxpayers filing jointly, the phaseout range is specific to each spouse based on whether they are a participant in an employer-sponsored plan:
- For a spouse who participates, the 2025 phaseout range limits will increase by $3,000, to $126,000–$146,000.
- For a spouse who doesn’t participate, the 2025 phaseout range limits will increase by $6,000, to $236,000–$246,000.
- For single and head-of-household taxpayers participating in an employer-sponsored plan, the 2025 phaseout range limits will increase by $2,000, to $79,000–$89,000.
- For married taxpayers filing jointly, the phaseout range is specific to each spouse based on whether they are a participant in an employer-sponsored plan:
Taxpayers with MAGIs in the applicable range can deduct a partial contribution; those with MAGIs exceeding the applicable range can’t deduct any IRA contribution.
But a taxpayer whose deduction is reduced or eliminated can make nondeductible traditional IRA contributions. The $7,000 contribution limit for 2025 (plus $1,000 catch-up, if applicable, and reduced by any Roth IRA contributions) still applies. Nondeductible traditional IRA contributions may also be beneficial if your MAGI is too high for you to contribute (or fully contribute) to a Roth IRA.
Roth IRAs. Whether you participate in an employer-sponsored plan doesn’t affect your ability to contribute to a Roth IRA, but MAGI limits may reduce or eliminate your ability to contribute:
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- For married taxpayers filing jointly, the 2025 phaseout range limits will increase by $6,000, to $236,000–$246,000.
- For single and head-of-household taxpayers, the 2025 phaseout range limits will increase by $4,000, to $150,000–$165,000.
You can make a partial contribution if your MAGI falls within the applicable range, but no contribution if it exceeds the top of the range.
(Note: Married taxpayers filing separately are subject to much lower phaseout ranges for traditional and Roth IRAs).
Revisit Your Retirement Plan
To better ensure your retirement plans remain on track, consider these 2025 inflation-adjusted contribution limits. Contact us and we can help you review your plans and make any necessary modifications.