IRS Contribution Limits

The IRS sets the maximum contribution limits that you and your employer can contribute to a 401(k) plan each years. These contribution limits have increased for 2025.

For 2025, the maximum annual contributions to a participant’s account from all contribution sources cannot exceed $70,000. Participants can make pre-tax or Roth elective deferral contributions up to a maximum of $23,500. Additionally, Individuals over 50 years of age can contribute an additional $7,500 in catch-up contributions, beginning in 2025, that catch-up contribution limit has been increased to $11,250 for individuals ages 60 to 63, but this only applies if your Plan has adopted this optional provision of the SECURE 2.0. We encourage you to check with your Plan Sponsor to see which catch-up contributions are available to you. The annual compensation limit of eligible compensation for 401(k) plans was also increased to $350,000 for 2025.

These contribution limits are applicable for both traditional and safe harbor 401(k) plans. This includes contributions into a Roth 401(k), a traditional 401(k), or a combination of the two. These limits do not impact your individual retirement account (IRA). There was no change to the IRA contribution limit for 2025, and individuals can still contribute a maximum of $7,000 to your their IRA, Plus an additional $1,000 in catch-up contributions for individuals over 50 years of age.

Do you have questions about how these increases will impact you or your organization? We’d love to chat with you! You can make an appointment to speak to one of our experts at any of our five locations.