On November 1st, the IRS announced several retirement plan contributions increases and cost-of-living adjustments (COLAs) for pension plans and other retirement-related items for 2025. New for the upcoming year, are the “super catch-up” contributions for eligible taxpayers ages 60 to 63 at the end of the year which is a provision from the SECURE 2.0 Act of 2022. Other key highlights of the announcement are the increases in 401(k) and SIMPLE plan deferrals and SEP contributions; the IRA contribution limit for many taxpayers remained unchanged.
The Social Security Administration issued its 2025 cost-of-living adjustments in mid-October. The more than 72.5 million taxpayers receiving Social Security and Supplemental Security Income (SSI) benefits will receive a 2.5% increase in monthly payments starting in January 2025 (Social Security beneficiaries) or December 31, 2024 (SSI recipients). For those subject to the Social Security tax, the wage base rose to $176,100, which is a $7,500 increase from 2024.
We’ve compiled a side-by-side comparison on the dollar limitations for benefits and contributions over the past three years. Many of these have minimal to no change from 2024. Contact your BMF Advisor if you have questions on these dollar limitations or to discuss your tax planning strategy.
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