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JOHN P. CLARK, CFP®
146 Lakeview Drive South
Suite 301
Gibbsboro, NJ
609 567-18884
fax 609-567-2028
mail@clarkassociates.net
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December 17, 2019

1 Must aggregate employee deferrals to all 401(k), 403(b), SAR-SEP, and SIMPLE plans of all employers; 457(b) contributions are not aggregated. For SAR-SEPs, the percentage limit is 25% of compensation reduced by elective deferrals (effectively a 20% maximum contribution).

2 Special catch-up limits may also apply to 403(b) and 457(b) plan participants.

 

Retirement Planning Key Numbers

Certain retirement plan and IRA limits rose for 2025. These tables offer an overview of the changes.

 

Elective deferral limits

2024 2025
401(k) plans, 403(b) plans, 457(b) plans, and SAR-SEPs1 (includes Roth contributions) Lesser of $23,000 or 100% of compensation ($30,500 if age 50 or older)2 Lesser of $23,500 or 100% of compensation ($31,000 if age 50 or older; $34,750 if age 60 to 63)2
SIMPLE 401(k) plans and SIMPLE IRA plans1 Lesser of $16,000 or 100% of compensation ($19,500 if age 50 or older) Lesser of $16,500 or 100% of compensation ($20,000 if age 50 or older; $21,750 if age 60 to 63)
SIMPLE 401(k) plans and SIMPLE IRA plans with 25 or fewer employees (or those that elect these higher limits)1Lesser of $17,600 or 100% of compensation ($21,450 if age 50 or older)Lesser of $17,600 or 100% of compensation ($21,450 if age 50 or older; $22,850 if age 60 to 63)
Starter 401(k) plans and safe-harbor 403(b) plansBetween 3% and 15% of annual compensation up to a maximum of $6,000 ($7,000 if age 50 or older) Between 3% and 15% of annual compensation up to a maximum of $6,000 ($7,000 if age 50 or older)
 

IRA contribution limits

2024 2025
Traditional and Roth IRAs Lesser of $7,000 or 100% of earned income ($8,000 if age 50 or older) Lesser of $7,000 or 100% of earned income ($8,000 if age 50 or older)
 

Defined benefit plan annual benefit limits

2024 2025
Annual benefit limit per participant Lesser of $275,000 or 100% of average compensation for highest three consecutive years Lesser of $280,000 or 100% of average compensation for highest three consecutive years
 

Defined contribution plan limits [qualified plans, 403(b) plans, and SEP plans]

2024 2025
Annual addition limit per participant (employer contributions; employee pre-tax, after-tax, and Roth contributions; and forfeitures) Lesser of $69,000 or 100% (25% for SEP) of participant's compensation Lesser of $70,000 or 100% (25% for SEP) of participant's compensation
Pension-linked emergency savings accounts (maximum amount attributable to employee deferrals)$2,500$2,500
Retirement plan compensation limits 2024 2025
Maximum compensation per participant that can be used to calculate tax-deductible employer contribution (qualified plans/SEPs)

$345,000

$350,000

Compensation threshold used to determine a highly compensated employee

$155,000 (when 2024 is the look-back year)

$160,000 (when 2025 is the look-back year)

Compensation threshold used to determine a key employee in a top-heavy plan

$1 for more-than-5% owners

$220,000 for officers

$150,000 for more-than-1% owners

$1 for more-than-5% owners

$230,000 for officers

$150,000 for more-than-1% owners

Compensation threshold used to determine a qualifying employee under a SIMPLE plan

$5,000

$5,000

Compensation threshold used to determine a qualifying employee under a SEP plan

$750

$750

 Income phase-out range for determining deductibility of traditional IRA contributions for taxpayers: 2024 2025

1. Covered by an employer-sponsored plan and filing as:

 

 

  Single/Head of household

$77,000 - $87,000

$79,000 - $89,000

  Married filing jointly

$123,000 - $143,000

$126,000 - $146,000

  Married filing separately

$0 - $10,000

$0 - $10,000

2. Not covered by an employer-sponsored retirement plan, but filing joint return with a spouse who is covered by a plan

$230,000 - $240,000

$236,000 - $246,000

Income phase-out range for determining ability to fund a Roth IRA for taxpayers filing as: 2024 2025

  Single/Head of household

$146,000 - $161,000

$150,000 - $165,000

  Married filing jointly

$230,000 - $240,000

$236,000 - $246,000

  Married filing separately

$0 - $10,000

$0 - $10,000

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Securities offered through Concourse Financial Group Securities, Inc. (CFGS), Member FINRA/SIPC. Advisory services offered through Concourse Financial Group Advisors, a DBA for CFGS, a Registered Investment Advisor.

Clark Associates Financial Planning Inc. is independent of CFGS.

Your investment experience, of course, will depend on the amount you invest and when you invest. Our information neither ensures a profit nor protects against a loss, and investors should consider their willingness to keep investing when share prices are declining. Nothing in our information projects any future results. Our information is only used for a conceptual explanation and not to be construed as suggesting, implying, or inferring any future results. Any discussion of taxes and/or what is to be included or excluded as an asset or income for any type of financial disclosure including but not limited to education, nursing facilities and financial statements is neither complete nor necessarily up-to-date. The laws and regulations are complex and subject to change. For complete details, consult your accountant, tax adviser, or attorney. Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity so you may lose money. Our Information may only be applicable at this time. Clark Associates is not rendering Accounting, Tax or Legal Advice.



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