Annual Plan Limits
Maximum Amounts that Can Be Funded to Qualified Retirement Plans
ERISA has established plan limits for contributions and benefits that apply to all qualified retirement plans. The chart below outlines the maximum contribution (or benefit) that can be funded to each type of qualified retirement plan. These limits are indexed annually for inflation.
Limit Type | 2025 | 2024 | 2023 |
|---|---|---|---|
Maximum Employee 401(k) or 403(b) Deferral | $23,500 | $23,000 | $22,500 |
Employee Catch-up Contributions* | $7,500 | $7,500 | $7,500 |
Maximum Contribution to Defined Contribution Plan | $70,000 | $69,000 | $66,000 |
Maximum Benefit in a Defined Benefit Limit | $280,000 | $275,000 | $265,000 |
Annual Limit on Compensation | $350,000 | $345,000 | $330,000 |
Highly Compensated Employees | $160,000 | $155,000 | $150,000 |
Social Security Wage Base | $176,100 | $168,600 | $160,200 | SIMPLE Deferral Limit | $16,500 | $16,000 | $15,500 | SIMPLE Catch-up Contribution Limit* | $3,500 | $3,500 | $3,500 |
*For those age 60, 61, 62, or 63 in 2025 the catch-up limit is $11,250
Defined Contribution Plans
Defined contribution plans, (e.g. profit sharing plans and 401(k) plans) contain limits on the amount of annual contributions that can be funded to the plan. These include both employee and employer limits. In determining contributions, employers must exclude salary above the annual compensation limit as shown in the chart above.
Participant Limits
- Profit Sharing Plans – For 2025, the maximum contribution that can be funded to a participant’s account is 100% of compensation up to $70,000.
- 401(k) Plans – For 2025, a participant can defer 100% of compensation into a 401(k) plan up to $23,500i. Participants age 50 and above are eligible to contribute an additional $7,500*, for a total of $31,000. The total contribution for employee deferrals and employer contributions, including forfeitures, is 100% of compensation up to $70,000 ($77,500ii for participants age 50 and above).
*For those age 60, 61, 62, or 63 in 2025 the catch-up limit is $11,250
Employer Limits
i Your company may impose more restrictive limitations. Please refer to the adoption Agreement for information specific to your plan. ii A participant must defer at least $7,500 in order to reach $77,500.
About JULY