2025 Cost of Living Adjustments

On November 1, 2024, the Internal Revenue Service (IRS) announced cost of living adjustments affecting dollar limitations for pension plans and other retirement-related items for tax year 2025. 

Eight significant changes will take place in 2025: 

• Annual elective deferral limits for 401(k), 403(b), and 457 plans will increase from $23,000 to $23,500 
• Enhanced Aged 60-63 Catch-Up Contributions limit is $11,250 
• Annual Defined Contribution limit will increase from $69,000 to $70,000
• Defined Benefit maximum benefit will increase from $275,000 to $280,000
• Annual compensation limit will increase from $155,000 to $160,000
• Top Heavy Key Employee limit will increase from $220,000 to $230,000
• Social Security Wage Base limit will increase from $168,600 to $176,100