2025 Contribution Limits
November 4, 2024
The new Retirement Plan Contribution Limits are official!
The following limits are going up for 2025:
- Maximum contributions for 401(k), 403(b) and 457 increases to $23,500
- Maximum contributions for highly compensated employees increased to $160,000
- Maximum contributions for SIMPLE retirement accounts increased to $16,500
- Maximum contributions for Defined Contribution Limit increased to $70,000
- NEW Super Catch-up for Age 60-63 is $11,250
There are a number of new provisions including the "super catch-up" for ages 60-63. Review the full list of contribution limit changes here.
Sometimes retirement plan problems begin with bad decisions. Other times, they begin with good intentions.
Law firms often have compensation structures that are more complex than those of other business types. This is attributable to having both equity and non-equity partners, large year-end bonuses, variable associate compensation, and high contribution goals for senior attorneys -- all these factors and more affect how a retirement plan operates. While these structures can create opportunities for sophisticated retirement plan design, they can also create testing volatility and compliance risk, especially if changes in compensation (or partnership/ownership) are not addressed throughout the year as they occur.
Technology is quickly transforming retirement plan administration. Today, employers can launch a retirement plan, connect payroll, enroll employees, process contributions, and access reports, all electronically and with far less manual effort needed than in the past.