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ComplianceTax & AccountingNovember 06, 2024

IRS announces 2025 retirement-plan related cost-of-living adjustments

By: Michael Schiller

IRA regular contribution limit will remain at $7,000

On November 1, 2024, the Internal Revenue Service issued Notice 2024-80 announcing retirement plan cost-of-living adjustments (COLAs) applicable to 2025. Though the traditional and Roth IRA regular and catch-up contribution limits will not increase, the income thresholds that determine traditional IRA deductibility, Roth IRA eligibility, and saver’s tax credit eligibility will slightly increase. Those limits, as well as simplified employee pension (SEP) limits, general elective deferral limits, and Savings Incentive Match Plan for Employees of Small Employers (SIMPLE) IRA deferral limits for 2025 are as follows:

IRA Contribution Limits
Tax Year Contribution Limit Catch-Up Contribution Age 50 and Older Contribution Limit
2025 $7,000 $1,000 $8,000
Traditional IRA Deductibility MAGI Thresholds*
Filing Status Tax Year Full Deduction Partial Deduction No Deduction
Single 2025 ≤ $79,000 Between $79,000 and $89,000 ≥ $89,000
Married, Joint 2025 ≤ $126,000 Between $126,000 and $146,000 ≥ $146,000
Married, Joint (not active participant but spouse is) 2025 ≤ $236,000 Between $236,000 and $246,000 ≥ $246,000
Married, Separate 2025 N/A < $10,000 ≥ $10,000
*Applies to individuals that actively participate in an employer sponsored retirement plan.
Roth IRA Eligibility MAGI Thresholds
Filing Status Tax Year Full Contribution Partial Contribution No Contribution
Single 2025 ≤ $150,000 Between $150,000 and $165,000 ≥ $165,000
Married, Joint 2025 ≤ $236,000 Between $236,000 and $246,000 ≥ $246,000
Married, Separate 2025 N/A < $10,000 ≥ $10,000
Saver's Tax Credit MAGI Thresholds
Filing Status Credit is 50% of Contribution if Income is: Credit is 20% of Contribution if Income is: Credit is 10% of Contribution if Income is: No Credit if Income is:
Married, Joint ≤ $47,500 $47,501 - $51,000 $51,001 - $79,000 > $79,000
Head of Household ≤ $35,625 $35,626 - $38,250 $38,251 - $59,250 > $59,250
All Other Filers ≤ $23,750 $23,751 - $25,500 $25,501 - $39,500 > $39,500
SEP Contribution Limits
Tax Year  
2025 The lesser of 25% of the first $350,000 of compensation or $70,000
Elective Deferral Limits
Tax Year Basic Deferral Limit Catch-Up Deferral (Based on Age) Total Deferral Limit (Based on Age)
2025 $23,500 (50-59) $7,500 (50-59) $31,000
(60-63) $11,250 (60-63) $34,750
(64+) $7,500 (64+) $31,000
SIMPLE Deferral Limits
Tax Year Basic Deferral Limit Catch-Up Deferral (Based on Age) Total Deferral Limit (Based on Age)
2025 $16,500* (50-59) $3,500* (50-59) $20,000
(60-63) $5,250 (60-63) $21,750
(64+) $3,500* (64+) $20,000
*Additional 10% might be possible.

For an opportunity to learn more about IRAs and other tax-advantaged accounts including Health Savings Accounts and Coverdell Education Savings Accounts, consider the Wolters Kluwer IRA Library or on-demand video training offered on a variety of topics. Go here to learn more about training opportunities available to you, or you can call us at 1-800-552-9408. 

Mike Schiller
Michael Schiller
Manager, Specialized Consulting, Tax Advantaged Accounts
With more than 26 years of experience, Mike has worked closely with hundreds of financial organizations to help them create, implement, and maintain their tax-advantaged accounts program.
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