November 2025
The SECURE 2.0 adopted a number of special provisions for participants of SIMPLE-IRA plans and 401(k) plans. The limits for 2026 are only estimates and the October newsletter will have final amounts.
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 limit is $17,600.
For 2025 a person with sufficient compensation age 50 or older is permitted to make elective deferrals of $20,000 ($16,500 + $3,500). If an employer has less than 25 eligible employees the limit is $21,450 ($17,600 + $3,850).
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 catch-up amount of $5,250 ($3,500 x 150%).
For 2026 a person with sufficient compensation under the age of 50 is permitted to make elective deferrals of $17,000. If an employer has less than 25 eligible employees the limit is $18,500.
For 2026 a person with sufficient compensation age 50 or older age of 50 is permitted to make elective deferrals of $21,000. If an employer has less than 25 eligible employees the limit is $22,500.
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.
In 2026 a person age 60, 61, 62 or 63 may defer an alternative catch-up amount.
© 2025 Copyright Collin W. Fritz and Associates, Ltd. “The Pension Specialists”