Retirement account contribution limits are adjusted for inflation each year. Inflation has moderated in recent months. Some contribution limits and income limits are projected to go up in 2025.
Before the IRS publishes the official adjustments for the next year in late October or early November, I calculate them using the published inflation numbers by the same rules the IRS uses as stipulated by law. I’ve maintained a track record of 100% accuracy ever since I started doing these calculations. The IRS Notice 2024-80 confirmed everything I have here.
- 2024 2025 401k/403b/457/TSP Elective Deferral Limit
- 2024 2025 Annual Additions Limit
- 2024 2025 SEP-IRA Contribution Limit
- 2024 2025 Annual Compensation Limit
- 2024 2025 Highly Compensated Employee Threshold
- 2024 2025 SIMPLE 401k and SIMPLE IRA Contribution Limit
- 2024 2025 Traditional and Roth IRA Contribution Limit
- 2024 2025 Deductible IRA Income Limit
- 2024 2025 Roth IRA Income Limit
- 2024 2025 Healthcare FSA Contribution Limit
- 2024 2025 HSA Contribution Limit
- 2024 2025 Saver’s Credit Income Limit
- All Together
- 2024 2025 Tax Brackets and Standard Deduction
2024 2025 401k/403b/457/TSP Elective Deferral Limit
The 401k/403b/457/TSP contribution limit is $23,000 in 2024. It will go up by $500 to $23,500 in 2025.
If you are age 50 or over by December 31, the catch-up contribution limit is $7,500 in 2024. It will stay the same at $7,500 in 2025.
If your age is 60 through 63 by December 31, 2025, you have a higher catch-up limit in 2025. It’ll be $11,250 in 2025.
If your prior year’s wages from the employer were over $145,000, your 2024 catch-up contribution must go to a Roth subaccount in the plan. The limit will be the same at $145,000 in 2025. The IRS has postponed enforcement of this rule.
Employer match or profit-sharing contributions aren’t included in these limits. If you work for multiple employers in the same year or if your employer offers multiple plans, you have one single employee contribution limit for 401k, 403b, and the federal government’s Thrift Savings Plan (TSP) across all plans.
The 457 plan limit is separate from the 401k/403b/TSP limit. You can contribute the maximum to both a 401k/403b/TSP plan and a 457 plan.
2024 2025 Annual Additions Limit
The total contributions from both the employer and the employee to all defined contribution plans by the same employer is $69,000 in 2024. It will increase to $70,000 in 2025.
The age-50-or-over catch-up contribution is separate from this limit. If you work for multiple employers in the same year, you have a separate annual additions limit for each unrelated employer.
2024 2025 SEP-IRA Contribution Limit
If you have self-employment income, you can contribute a percentage of your self-employment income to a SEP-IRA. The SEP-IRA contribution limit is always the same as the annual additions limit for a 401k plan. It is $69,000 in 2024, and it will increase to $70,000 in 2025.
Because the SEP-IRA doesn’t allow employee contributions, unless your self-employment income is well above $200,000, you have a higher contribution limit if you use a solo 401k. See Solo 401k When You Have Self-Employment Income.
2024 2025 Annual Compensation Limit
The maximum annual compensation that can be considered for making contributions to a retirement plan is always 5x the annual additions limit. Therefore the annual compensation limit is $345,000 in 2024. It will increase to $350,000 in 2025.
2024 2025 Highly Compensated Employee Threshold
If your employer limits your contribution because you’re a Highly Compensated Employee (HCE), the minimum compensation to be counted as an HCE is $155,000 in 2024. It will go up to $160,000 in 2025.
2024 2025 SIMPLE 401k and SIMPLE IRA Contribution Limit
Some smaller employers offer a SIMPLE 401k or a SIMPLE IRA plan instead of a regular 401k plan. SIMPLE 401k and SIMPLE IRA plans have a lower contribution limit than standard 401k plans. The contribution limit for SIMPLE 401k and SIMPLE IRA plans is $16,000 in 2024. It will go up to $16,500 in 2025.
Employers with fewer than 25 employees and larger employers that contribute more to the plan have a higher contribution limit. The regular contribution limit to their SIMPLE plans is $17,600 in 2024 and 2025.
If you are 50 or over by December 31, 2024, the catch-up contribution limit in a SIMPLE 401k or SIMPLE IRA plan is $3,500 in 2024 ($3,850 for smaller employers). It will be the same $3,500 in 2025 for ages 50-59 and 64 and over and $5,250 for ages 60 through 63.
Employer contributions to a SIMPLE 401k or SIMPLE IRA plan aren’t included in these limits.
2024 2025 Traditional and Roth IRA Contribution Limit
You need taxable compensation (“earned income”) to contribute to a Traditional or Roth IRA but there’s no age limit. The Traditional IRA or Roth IRA contribution limit is $7,000 in 2024. It will stay the same at $7,000 in 2025.
If you are age 50 or over by December 31, the catch-up limit is $1,000 in 2024. It will stay the same at $1,000 in 2025.
The IRA contribution limit is shared between the Traditional IRA and the Roth IRA. If you contribute the maximum to a Roth IRA, you can’t contribute the same maximum again to a Traditional IRA, and vice-versa.
The IRA contribution limit and the 401k/403b/TSP or SIMPLE contribution limit are separate. You can contribute the respective maximum to both a 401k/403b/TSP/SIMPLE plan and a Traditional IRA or Roth IRA.
2024 2025 Deductible IRA Income Limit
The income limit for taking a full deduction for your contribution to a Traditional IRA while participating in a workplace retirement plan in 2024 is $77,000 for single filers and $123,000 for a married couple filing jointly. The deduction completely phases out when your income goes above $87,000 in 2024 for singles and $143,000 for married filing jointly.
The full-deduction limits will go up in 2025 to $79,000 for single filers and to $126,000 for a married couple filing jointly. The deduction will completely phase out when your income goes above $89,000 in 2025 for singles; and above $146,000 for married filing jointly.
When you’re not covered in a workplace retirement plan but your spouse is, the income limit for taking a full deduction for your contribution to a Traditional IRA is $230,000 in 2024. The deduction completely phases out when your joint income goes above $240,000 in 2024.
The full-deduction limit will go up to $236,000 in 2025. The deduction completely phases out when your joint income goes above $246,000 in 2025.
When you exceed the income limit for taking a deduction for contributing to a Traditional IRA, consider contributing to a Roth IRA instead.
2024 2025 Roth IRA Income Limit
The income limit for contributing the maximum to a Roth IRA depends on your filing status. It’s $146,000 for singles and $230,000 for married filing jointly in 2024. These limits will go up to $150,000 for singles and $236,000 for married filing jointly in 2025.
You can’t contribute anything directly to a Roth IRA when your income goes above $161,000 in 2024 for singles and $240,000 in 2024 for married filing jointly. These limits will go up to $165,000 for singles and $246,000 for married filing jointly in 2025.
Your contribution eligibility is prorated in the income phase-out range. When you exceed the income limit for contributing to a Roth IRA, consider doing the Backdoor Roth.
2024 2025 Healthcare FSA Contribution Limit
The Healthcare FSA contribution limit is $3,200 per person in 2024. It will go up to $3,300 in 2025.
Some employers allow carrying over some unused amount to the following year. The maximum amount that can be carried over to the following year is set to 20% of the contribution limit in the current tax year. As a result, the carryover limit is $640 per person in 2024. It will go up to $660 in 2025.
2024 2025 HSA Contribution Limit
You need to have a High Deductible Health Plan with no other coverage to contribute to a Health Savings Account (HSA). Not all high-deductible health insurance is HSA-eligible. Medicare or your spouse having a general-purpose healthcare FSA counts as having other coverage, which makes you ineligible to contribute to an HSA.
You don’t need taxable compensation (“earned income”) to contribute to an HSA.
The HSA contribution limit for single coverage is $4,150 in 2024. The HSA contribution limit for family coverage is $8,300 in 2024. These limits will go up to $4,300 for single coverage and $8,550 for family coverage in 2025. The new limits were announced previously in the spring. Please see HSA Contribution Limits.
Those who are 55 or older by December 31 can contribute an additional $1,000. If you are married and both of you are 55 or older by December 31, each of you can contribute the additional $1,000 but they must go into separate HSAs in each person’s name.
2024 2025 Saver’s Credit Income Limit
The income limits for receiving a Retirement Savings Contributions Credit (“Saver’s Credit”) in 2024 for married filing jointly are $46,000 (50% credit), $50,000 (20% credit), and $76,500 (10% credit). These limits in 2025 will go up to $47,500 (50% credit), $51,000 (20% credit), and $79,000 (10% credit).
The limits for singles are half of the limits for married filing jointly. The 2024 limits are $23,000 (50% credit), $25,000 (20% credit), and $38,250 (10% credit). The 2025 limits will be $23,750 (50% credit), $25,500 (20% credit), and $39,500 (10% credit)
All Together
| 2024 | 2025 | Increase | |
|---|---|---|---|
| 401k, 403b, or 457 plan employee contributions limit | $23,000 | $23,500 | $500 |
| 401k, 403b, or 457 plan ages 50-59 and 64+ catch-up contributions limit | $7,500 | $7,500 | None |
| 401k, 403b, or 457 plan ages 60-63 catch-up contributions limit | $7,500 | $11,250 | $3,750 |
| SIMPLE plan contributions limit | $16,000 | $16,500 | $500 |
| SIMPLE plan contributions limit at eligible employers | $17,600 | $17,600 | None |
| SIMPLE plan ages 50-59 and 64+ catch-up contributions limit | $3,500 | $3,500 | None |
| SIMPLE plan ages 50-59 and 64+ catch-up contributions limit at eligible employers | $3,850 | $3,850 | None |
| SIMPLE plan ages 60-63 catch-up contributions limit | $3,500 | $5,250 | $1,750 |
| Maximum annual additions to all defined contribution plans by the same employer | $69,000 | $70,000 | $1,000 |
| SEP-IRA contributions limit | $69,000 | $70,000 | $1,000 |
| Highly Compensated Employee definition | $155,000 | $160,000 | $5,000 |
| Annual Compensation Limit | $345,000 | $350,000 | $5,000 |
| Traditional and Roth IRA contribution limit | $7,000 | $7,000 | None |
| Traditional and Roth IRA age 50+ catch-up contribution limit | $1,000 | $1,000 | None |
| Deductible IRA income limit, single, active participant in workplace retirement plan | $77,000 – $87,000 | $79,000 – $89,000 | $2,000 |
| Deductible IRA income limit, married, active participant in workplace retirement plan | $123,000 – $143,000 | $126,000 – $146,000 | $3,000 |
| Deductible IRA income limit, married, spouse is active participant in workplace retirement plan | $230,000 – $240,000 | $236,000 – $246,000 | $6,000 |
| Roth IRA income limit, single | $146,000 – $161,000 | $150,000 – $165,000 | $4,000 |
| Roth IRA income limit, married filing jointly | $230,000 – $240,000 | $236,000 – $246,000 | $6,000 |
| Qualified Charitable Distributions (QCD) limit | $105,000 | $108,000 | $3,000 |
| Healthcare FSA Contribution Limit | $3,200 | $3,300 | $100 |
| HSA Contribution Limit, single coverage | $4,150 | $4,300 | $150 |
| HSA Contribution Limit, family coverage | $8,300 | $8,550 | $250 |
| HSA, age 55 catch-up | $1,000 | $1,000 | None |
| Saver’s Credit income limit, married filing jointly | $46,000 (50%) $50,000 (20%) $76,500 (10%) | $47,500 (50%) $51,000 (20%) $79,000 (10%) | $1,500 (50%) $1,000 (20%) $2,500 (10%) |
| Saver’s Credit income limit, single | $23,000 (50%) $25,000 (20%) $38,250 (10%) | $23,750 (50%) $25,500 (20%) $39,500 (10%) | $750 (50%) $500 (20%) $1,250 (10%) |
Source: IRS Notice 2023-75, Notice 2024-80.
2024 2025 Tax Brackets and Standard Deduction
I also calculated the 2025 income tax brackets, standard deduction, capital gains tax brackets, gift tax exclusion limit, and the QCD limit. Please read 2025 Tax Brackets, Standard Deduction, Capital Gains, etc.
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Dippy says
Per WSJ, “High Earners 50 and Up Get Two-Year Reprieve From IRS on 401(k) Rule”. Good news for some taxpayers.
Jason says
Making sure I understand it:
The $22,500 401(k) Pre-tax/Roth limit applies between ALL employers you have during the year, but…
The $66,000 annual additions limit applies to EACH employer you have during the year, so…
You could max out the annual additions limit for each employer by filling it with after-tax contributions and therefore (if eligible) do multiple Mega Backdoor Roths over the span of a year? Example, if under 50:
Employer 1: $12,000 Pre-Tax, $6000 Employer Match, $48,000 After-Tax (convert to Roth)
Employer 2: $12,500 Pre-Tax, $6000 Employer Match, $47,500 After-Tax (convert to Roth)
Is this a correct plan? I realize it’s aggressive, just making sure I understand how it works. Thanks.
Harry Sit says
Your employee pre-tax contributions between two employers add up to $24,500 but it’s going in the right direction in terms of total employee + employer contributions. That’s assuming the two employers aren’t related and both plans allow non-Roth after-tax contributions (to be converted to Roth).
Dan says
Yes – I have done this when switching employers.
Eric says
This site has been a great resource for me to figure out these calculations and thank you to everyone who has posted their comments and questions. I’ve got my tax bracket calculations dead-on and below are the C-CPI-U numbers (prior to being adjusted by the IRS after-the-fact) I’ve used to fine-tune them consolidated from different sources in case others are also trying to do this on their own
2018 baseline: 138.237 (found online)
2022: 149.2708 (found online)
2023: 159.84 (calculated)
2024: 168.475 (used the actual data)
I also calculated out my own coefficients that let me take the overall MFJ tax brackets and break them out into the actual tax tables for MFJ monthly and MFJ biweekly by just noticing the trends through the years if anybody wants those.
I’m still having trouble getting the calculations right for IRA limits. For 401K, I followed the guidance and took the 2023 Jul-Sep CPI-U average (306.033) and compared to 2006 (196.867, $15,000) and it came out correct for this year, I just don’t have enough data to confirm it’s right and will work in future years. For IRAs, neither the C-CPI method or the 401K method give me the correct numbers for this year. Also the tax law mentions a base line from 2007 and I can’t find that data anywhere. I’ve really enjoyed trying to figure this out for myself but finally hit a brick wall. Any guidance on IRA adjustments is greatly appreciated.
Ashley says
The IRA baseline is determined by taking the CPI-U from 2007 and multiplying it by the C-CPI-U from 2016 divided by the CPI-U from 2016. Try using 116.75 as your baseline. The calculation for 2024 limits would be (1 + the average C-CPI-U for Sep 2022 to Aug 2023 (168.75) minus the baseline (116.75) divided by the baseline) multiplied by $5000 then rounded down to the nearest $500. So, (1 + (168.75-116.75)/116.75) = 144.54%. 144.54% * $5000 = $7226.98, rounded down to $7000. Also keep in mind that C-CPI-U data is revised every so often, so the data published at this moment isn’t exactly the same as the data as it was when the limits for 2024 were determined.
Eric says
Thank you! (Website won’t let me respond to your comment directly.) It all makes sense now and working it backwards the changes match to past years. I’m on top of the C-CPI-U adjustments and catch them on the final release every year now. Based on a 2% growth rate estimate, I can forecast IRA limits going up to $7,500 from 2026-2029, $8,000 in 2030-2032, and $8,500 in 2032 pending major tax law changes and C-CPI-U variations.
Ashley says
My models currently have the IRA limit at $7000 for 2025, $7500 for 2026 and 2027, and $8000 for 2028 and 2029. I’m using a trailing 12-month average for the inflation rate though, so I’m less certain the further out it gets given the unusually high rate as of late.
Scot Dahl says
Regarding the 2025 catch-up contribution limit for ages 60-63. You projected that this would be $12,000 which is 150% of your projected 2025 regular age 50+ catch-up contribution amount of $8,000.
However IRC section 414(v)(2)(E)(i) states that, “… For purposes of subparagraph (B), the adjusted dollar amount is …, the greater of (I) $10,000, or (II) an amount equal to 150 percent of the dollar amount which would be in effect under such clause for 2024 for eligible participants not described in the parenthetical in such clause…”. This would seem to indicate that the 60-63 catch-up contribution for 2025 is 150% of $7,500 – the 2024 regular catch-up limit.
Confusingly, IRC 414(v)(2)(E)(ii)(II) – covering SIMPLE plans uses, “… 150 percent of the dollar amount … for 2025 …”. Go figure.
Harry Sit says
Thank you for pointing that out, Scot. You’re right. I edited the ages 60-63 catch-up contribution limit for 2025. These higher catch-up limits also have their own inflation adjustment and rounding. Simply adding 50% to the regular catch-up limit would be much easier to explain.
Harry Sit says
I heard there’s a SECURE 2.0 technical correction bill currently in draft. If it’s passed it will make the 2025 age 60-63 catch-up limit 150% of the regular catch-up in 2025 (not 2024 as originally written in the law).
Ashley says
Are you assuming that the YoY inflation data for September will be the same or lower than it was YoY for August? My models are showing that it would only take 2.55% YoY in September to push the 401k limit to $24k and the catch up limit to $8k. And that’s not necessarily something that’s outside the realm of possibilities, even taking into account the Cleveland Fed’s nowcast for September being 2.29%.
Harry Sit says
I had them at $24,000 and $8,000 before but the August CPI pulled them down. I agree with your 2.55% YoY number. It translates to a 0.27% MoM increase. The recent MoM increases were 0.17%, 0.03%, 0.12%, and 0.08% in the last four months. Can it jump to 0.27% in September? It’s possible but if I must pick only one number I would go with Cleveland Fed’s 0.15%, which means $23,500 and $7,500.
Ashley says
Makes sense. And September does seem to historically be a lower increase month. I’ll take the lower inflation over the higher limit any day.
Eric says
I have a question about the Annual Additions Limit. Does this apply also to total combined contributions to 403b and 457b accounts? For example, if I contribute $23,500 to both a 403b and 457b, does that count as $47,000 toward the limit? Or do only 403b (and 401k) contributions count toward that limit?
Harry Sit says
457 plan limits are always separate. Only 403b (and 401k) contributions count toward the annual additions limit.
Scott D says
I really appreciate these projections, I love being able to think it out as early as possible and be able to act decisively later.