22.6 Qualified Retirement Plans Overview
Key Takeaways
- Tax Year 2025 401(k)/403(b)/457 elective deferral limit: $23,500 (+$7,500 catch-up age 50+).
- SECURE 2.0 super catch-up for ages 60-63 (2025+): $11,250 in 401(k)/403(b)/457.
- Tax Year 2025 IRA limit: $7,000 (+$1,000 catch-up age 50+).
- Roth IRA phase-out 2025: $150K-$165K Single/HoH; $236K-$246K MFJ.
- SIMPLE IRA 2025: $16,500 (+$3,500 catch-up); super catch-up ages 60-63: $5,250.
- SEP-IRA 2025: 25% of comp, max $70,000; compensation cap $350,000.
- Defined contribution §415 limit 2025: $70,000; defined benefit limit: $280,000.
Qualified Retirement Plans: Tax Year 2025 Limits
Why This Matters for the Exam
Retirement plan contribution limits are heavily tested. The exam tests current-year limits for various plan types, regular catch-up, and the SECURE 2.0 super catch-up.
Exam Note: For the July 1, 2026 - February 28, 2027 testing window, you are tested on Tax Year 2025 limits. SECURE 2.0's age-60-63 super catch-up first applies in 2025.
Expect at least 3-4 questions on retirement plan limits.
401(k) / 403(b) / 457(b) / TSP Plans (2025)
| Limit Type | Tax Year 2025 |
|---|---|
| Employee elective deferral | $23,500 |
| Regular catch-up (age 50+) | +$7,500 |
| Total (age 50-59 and 64+) | $31,000 |
| SECURE 2.0 super catch-up (ages 60-63) | +$11,250 (instead of $7,500) |
| Total (ages 60-63) | $34,750 |
| Annual additions limit §415 | $70,000 |
| Annual compensation cap §401(a)(17) | $350,000 |
Traditional and Roth IRA (2025)
| Limit Type | Tax Year 2025 |
|---|---|
| Contribution limit | $7,000 |
| Catch-up (age 50+) | +$1,000 |
| Total (age 50+) | $8,000 |
Roth IRA Income Phase-Outs (2025)
| Filing Status | Phase-Out Range (MAGI) |
|---|---|
| Single / HoH | $150,000 - $165,000 |
| MFJ | $236,000 - $246,000 |
| MFS (lived with spouse) | $0 - $10,000 |
Traditional IRA Deduction Phase-Outs 2025 (Active Participant)
| Filing Status | Phase-Out Range (MAGI) |
|---|---|
| Single / HoH | $79,000 - $89,000 |
| MFJ (filer covered) | $126,000 - $146,000 |
| MFJ (spouse only covered) | $236,000 - $246,000 |
| MFS (lived with spouse) | $0 - $10,000 |
SIMPLE IRA (2025)
| Limit Type | Tax Year 2025 |
|---|---|
| Employee elective deferral | $16,500 |
| Regular catch-up (age 50+) | +$3,500 |
| Super catch-up (ages 60-63) | +$5,250 (instead of $3,500) |
| Employer match | Up to 3% of comp (or 2% non-elective) |
SEP-IRA (2025)
| Limit Type | Tax Year 2025 |
|---|---|
| Employer contribution | Lesser of 25% of comp or $70,000 |
| Compensation limit | $350,000 |
| SEP participation threshold | $750 |
| Employee contributions | Not allowed |
Defined Benefit Plan Annual Benefit Limit (2025)
$280,000 — the largest annual pension benefit a DB plan can pay.
Highly Compensated Employee (HCE) & Key Employee (2025)
- HCE compensation threshold: $160,000.
- Key employee comp: $230,000.
Comparison Table (2025)
| Plan | Employee Limit | Regular Catch-Up | Super Catch-Up 60-63 | Employer Can Contribute |
|---|---|---|---|---|
| 401(k) | $23,500 | $7,500 | $11,250 | Yes |
| IRA | $7,000 | $1,000 | N/A | No |
| SIMPLE | $16,500 | $3,500 | $5,250 | Yes (required) |
| SEP | $0 | $0 | N/A | Yes (employer only) |
SECURE 2.0 Key 2025 Provisions
| Provision | 2025 Status |
|---|---|
| Super catch-up (ages 60-63) | ACTIVE in 2025 (401k/403b/457b: $11,250; SIMPLE: $5,250) |
| Mandatory Roth catch-up for high earners | Delayed to 2026 (IRS extended grace period) |
| Auto-enrollment (new 401(k)/403(b) plans started 2023+) | Required to auto-enroll new participants 2025+ |
| Saver's Credit 2025 | AGI ≤ $39,500 Single / $59,250 HoH / $79,000 MFJ |
Saver's Credit 2025 (Retirement Savings Contributions Credit)
| Filing Status | Full Credit AGI | Partial Credit AGI |
|---|---|---|
| Single / MFS | ≤ $23,750 (50%) | up to $39,500 (10%) |
| HoH | ≤ $35,625 (50%) | up to $59,250 (10%) |
| MFJ | ≤ $47,500 (50%) | up to $79,000 (10%) |
Real-World Scenario
Scenario: A 61-year-old employee earns $200,000 in 2025 and participates in both a 401(k) and an IRA.
- 401(k) limit: $23,500 + $11,250 super catch-up = $34,750.
- IRA limit: $7,000 + $1,000 catch-up = $8,000.
- Total potential employee deferrals: $42,750.
- Compared to age 55: Would only get $31,000 (regular catch-up).
On the Exam
Expect 3-4 questions on retirement limits, typically:
- 401(k) Limit Questions: "What is the 2025 401(k) contribution limit for someone under 50?"
- Super Catch-Up Questions: "What is the 2025 super catch-up for ages 60-63?"
- Roth Phase-Out Questions: "At what AGI is Roth IRA eligibility phased out for a single filer?"
- SEP Questions: "What is the maximum 2025 SEP contribution?"
The key is to remember: 401(k) = $23,500 (+$7,500 regular; +$11,250 super 60-63). IRA = $7,000 (+$1,000). SEP = 25%/$70,000. SIMPLE = $16,500 (+$3,500; +$5,250 60-63).
What is the Tax Year 2025 401(k) elective deferral limit for someone under age 50?
What is the Tax Year 2024 IRA contribution limit for someone age 55?
What is the maximum Tax Year 2025 SEP-IRA contribution?