2025 Retirement Plan Cost of Living Adjustments
Posted by Robert Ingrasci on November 12, 2024
Lumsden McCormick presents a summary of the significant cost-of-living adjustments (COLA) effective for 2025. These adjustments, recently announced by the Internal Revenue Service (IRS Notice 2024-80) and the Social Security Administration (SSA), have a wide-ranging impact, including the savings rate for retirement plans. All annual compensation amounts and limits for elective deferrals were increased, except for catch-up contribution limits.
Key changes include an increase in the annual salary deferral limit for 401(k) and 403(b) plans to $23,500, and a rise in the threshold for highly compensated employees to $160,000. This notice also introduces optional SECURE 2.0 Super Catch-up amounts for participants aged 61-63.
for more information
Bob is an experienced tax professional who devotes his professional time to structuring tax strategies in the areas of compliance, consulting, and planning. Bob works closely with a broad range of high-net-worth individuals and multi-generational families, specializing in the areas of gift and estate planning, charitable gift planning, trust and estate administration, individual taxation, and wealth preservation. Bob serves as a practice leader in the Family Wealth and Estate Planning group. Bob joined Lumsden McCormick in 2008 and was named partner in 2022.