October 2024
The SECURE 2.0 adopted a number of special provisions for participants of SIMPLE-IRA plans and 401(k) plans. This article discusses the special changes for SIMPLE-IRA plans.
For 2024 a person with sufficient compensation under the age of 50 is permitted to make elective deferrals of $16,000. If an employer has less than 25 eligible employees this limit is automatically increased to be $17,600.
For 2024 a person with sufficient compensation age 50 or older is permitted to make elective deferrals of $19,500. If an employer has less than 25 eligible employees this limit is automatically increased to be $21,450.
An employer with 25 or more eligible employees must amend its plan to allow the higher deferral amount and the employers matching contribution must be 4% of compensation or it must make a nonelective contribution of 3% of compensation.
For 2025 a person with sufficient compensation under the age of 50 is permitted to make elective deferrals of $16,500. If an employer has less than 25 eligible employees the $17,600 limit does not change or increase.
For 2025 a person with sufficient compensation age 50 or older age of 50 is permitted to make elective deferrals of $20,000. If an employer has less than 25 eligible employees the $21,450 limit does not change or increase.
An employer with 25 or more eligible employees must amend its plan to allow the higher deferral amount and the employers matching contribution must be 4% of compensation or it must make a nonelective contribution of 3% of compensation.
Commencing in 2025 a person age 60, 61, 62 or 63 may defer an alternative amount of $5,250 rather than the limit of $3,500 or the limit of $3,850 ($3,500 x 110%), This is not in addition, but is an alternative limit.
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