Retirement Cost-of-Living Adjustments
Maximum Dollar Limitations
Employee Deferral Limits |
2025 |
2024 | 2023 | 2022 |
2021 |
401(k) Contribution | $23,500 | 23,000 | 22,500 | 20,500 | 19,500 |
403(b) Contribution | $23,500 |
23,000 |
22,500 |
20,500 | 19,500 |
457 Contribution |
$23,500 |
23,000 | 22,500 | 20,500 | 19,500 |
SIMPLE 401(k)/IRA |
$16,500 | 16,000 | 15,500 | 14,000 | 13,500 |
Employee Catch-Up Limits | |||||
401(k), 403(b), 457 |
$7,500 | 7,500 | 6,500 | 6,500 | 6,500 |
SIMPLE 401(k)/IRA |
$3,500 | 3,500 | 3,000 | 3,000 | 3,000 |
Enhanced (for those ages 60-63)* |
$11,250 | N/A | N/A | N/A | N/A |
Other Plan Limitations | |||||
Compensation Cap |
$350,000 |
345,000 |
330,000 |
305,000 | 290,000 |
Defined Benefit Plan Maximum Benefit |
$280,000 |
275,000 |
265,000 |
245,000 |
230,000 |
Defined Contribution Plan Maximum Contribution | $70,000 |
69,000 |
66,000 |
61,000 |
58,000 |
Highly Compensated Employees’ Compensation Exceeding | $160,000 |
155,000 |
150,000 | 135,000 |
130,000 |
Key Employee Officer Compensation |
$230,000 |
220,000 | 215,000 | 200,000 |
185,000 |
Key Employee 1% Owner |
$150,000 |
150,000 | 150,000 | 150,000 |
150,000 |
SEP Participation Coverage Compensation Level |
$750 |
750 | 750 | 650 |
650 |
ESOP Threshold for 5-Year Distribution Period |
$1,415,000 |
1,380,000 |
1,330,000 | 1,230,000 |
1,165,000 |
ESOP Incremental Threshold for Extending 5-Year Distribution Period (max 5 additional years) |
$280,000 | 275,000 | 265,000 | 245,000 |
230,000 |
Social Security Taxable Wage Bases | |||||
– Social Security | $176,100 |
168,600 |
160,200 | 147,000 | 142,800 |
– Medicare |
No Limit |
No Limit | No Limit | No Limit |
No Limit |
Social Security Tax Rates | By Percentage | ||||
– Social Security – Employer |
6.20 |
6.20 | 6.20 | 6.20 |
6.20 |
– Social Security – Employee |
6.20 |
6.20 | 6.20 | 6.20 |
6.20 |
– Medicare – Employer and Employee |
1.45 |
1.45 | 1.45 | 1.45 |
1.45 |
– Per Employer/Per Employee Combined Rate |
7.65 |
7.65 | 7.65 | 7.65 |
7.65 |
Combined Rate |
15.30 |
15.30 | 15.30 | 15.30 |
15.30 |
Additional Medicare Tax on Wages above $200,000 – Employee Only |
.9** |
.9** | .9** | .9** |
.9** |
*Optional under SECURE 2.0. Each plan sponsor will decide whether to implement this feature in their retirement plans. Participants must meet specific criteria.
**The Affordable Care Act imposes an additional .9% Medicare tax on wages above $200,000 ($250,000 for married couples filing jointly, $125,000 for married couples filing separately, and $200,000 for other filers). Employers are required to withhold the additional .9% Medicare tax (a total of 2.35%) on wages above $200,000, regardless of the employee’s tax filing status. Employers do not match this additional tax.