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.
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
Question types to practice on retirement limits:
- 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?
$23,000
$23,500
$24,500
$30,500
What is the Tax Year 2024 IRA contribution limit for someone age 55?
$7,000
$7,500
$8,000
$10,000
What is the maximum Tax Year 2025 SEP-IRA contribution?
$23,500
$50,000
$69,000
$70,000
Sections you finish are checked off in the contents.