2025 SIMPLE IRA LIMIT for those 60-63 who work at a small employer
2025 is the first year that those 60-63 get an increase of catch-up contributions to $5,250. Also, the regular SIMPLE limit is now $16,500 for 2025.
My first question is for one who works for an employer with less than 25 employees, does the $16,500+ 5,250 or $21,750 get increased by the small employer percentage of 10% so that the limit is $23,925?
My second question is for someone over 63 years old who works for an employer with less than 25 employees, is the SIMPLE limit now $16,500 + 3,500 or $20,000 x 110% or $22,000?
Permalink Submitted by Alan - IRA critic on Tue, 2024-11-19 13:22
It’s not clear. While the IRS has stated that the basic limit is 16,500 for 2025, there is a question if that is actually correct. Scroll down to the thread posted by Harry Sit, who sponsors as well reputed retirement plan site, as he outlines what he thinks is the correct limit. It seems that the question mostly relates to whether the 110% factor was just a one off high inflation adjustment for 2024, or if 2025 should spin off the 17,600 2024 limit or not. Reading the actual Secure 2.0 provision is difficult due to multiple tax code cross references.