Here are the latest 2025 COLA adjustments and contribution limits for retirement accounts and Social Security, presented in a summary table:
| Contribution/Limit Type | 2025 Limit | 2024 Limit | 2023 Limit |
|---|---|---|---|
| 401(k), 403(b), and 457(b) Elective Deferral | $23,500 | $23,000 | $22,500 |
| Catch-up (Age 50+) for 401(k), 403(b), 457(b) | $7,500 | $7,500 | $7,500 |
| Increased Catch-up (Ages 60-63) | $11,250 | N/A | N/A |
| IRA Contribution Limit | $7,000 | $7,000 | $6,500 |
| IRA Catch-up (Age 50+) | $1,000 | $1,000 | $1,000 |
| SIMPLE IRA Deferral | $16,500 | $16,000 | $15,500 |
| SIMPLE IRA Catch-up (Age 50+) | $3,500 | $3,500 | $3,500 |
| Defined Contribution Plan Max Additions | $70,000 | $69,000 | $66,000 |
| Defined Benefit Plan Annuity Limit | $280,000 | $275,000 | $265,000 |
| Compensation Limit for Contributions | $350,000 | $345,000 | $330,000 |
| Highly Compensated Employee Threshold | $160,000 | $155,000 | $150,000 |
| Social Security Wage Base | $176,200 | $168,600 | $160,200 |
Here’s a chart that summarizes the key updates for 2025:
| Retirement Plan Type | 2025 Contribution Limits |
|---|---|
| 401(k), 403(b), 457 Plans | $23,500 employee contribution (under 50); $31,000 (50+ with catch-up) |
| Traditional & Roth IRAs | $7,000 (under 50); $8,000 (50+ with catch-up) |
| SEP IRAs | 25% of compensation or $70,000 maximum |
| SIMPLE IRA | $16,500 (under 50); $20,000 (50+ with catch-up) |
These adjustments reflect changes due to inflation, affecting retirement contributions and Social Security calculations. Key updates include the higher catch-up contribution for those between 60 and 63, a feature of the Secure 2.0 Act, along with increased caps across multiple retirement savings accounts
SEP IRA and Additional Details:
For SEP IRAs, the 2025 contribution is capped at the lesser of 25% of compensation or $70,000 for employees and small business owners. Note that the SEP IRA does not permit catch-up contributions, unlike other retirement accounts. Contributions are subject to specific limits for self-employed individuals based on net earnings
These adjustments help individuals and small businesses maximize retirement savings while staying aligned with inflationary trends. For more detailed information about the requirements and eligibility for these plans, check the IRS guidelines or consult a financial advisor.
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