2025 COLA indexed amounts: IRS limits for employer-sponsored retirement and health plans, Social Security benefits, and PBGC premiums
The Internal Revenue Service (IRS) and the Social Security Administration have announced the 2025 cost-of-living adjustment (COLA) values for defined benefit (DB) and defined contribution (DC) retirement plans and Social Security benefits. In addition, the Pension Benefit Guaranty Corporation (PBGC) has published the 2025 single-employer and multiemployer DB plan premium rates. This Client Action Bulletin provides the limits for 2025, along with the corresponding limits for 2024 and 2023.
IRS, PBGC, and Social Security figures for 2025, 2024, and 2023
To download a printable version of the below table of key figures, please click here.
| Retirement plan compensation and benefits limits | 2025 | 2024 | 2023 |
|---|---|---|---|
| Maximum annual annuity for DB plansi | $280,000 | $275,000 | $265,000 |
| Maximum annual additions for DC plansii | $70,000 | $69,000 | $66,000 |
| Maximum §401(k), §403(b), and §457(b) deferraliii | $23,500 | $23,000 | $22,500 |
| “Catch-up” contribution limit for DC plans Catch-up limit for those aged 60, 61, 62, or 63 |
$7,500 $11,250 |
$7,500 $7,500 |
$7,500 $7,500 |
| Compensation limit | $350,000 | $345,000 | $330,000 |
| Highly compensated employee | $160,000 | $155,000 | $150,000 |
| Key employee / Officer compensation | $230,000 | $220,000 | $215,000 |
| Portion of emergency savings account in DC plans attributable to participant contributions | $2,500 | $2,500 | N/A |
| Prior-year wage threshold triggering Roth catch-up contributions to DC plans | $145,000 | $145,000 | N/A |
| PBGC premiums for applicable DB plans | 2025 | 2024 | 2023 |
| Single-employer plan flat rate premium per participant | $106 | $101 | $96 |
| Single-employer plan variable rate premium (VRP) per $1,000 of unfunded vested benefits (UVB)iv | $52 | $52 | $52 |
| Maximum single-employer plan VRP per participant | $717 | $686 | $652 |
| Multiemployer plan flat rate premium | $39 | $37 | $35 |
| Social Security thresholds | 2025 | 2024 | 2023 |
| Social Security taxable wage base (SSTWB) | $176,100 | $168,600 | $160,200 |
| Maximum Social Security Old-Age, Survivors, and Disability Insurance program (OASDI) payroll tax (6.2% of SSTWB) paid by both the employee and the employerv | $10,918.20 | $10,453.20 | $9,932.40 |
| Maximum monthly Social Security benefit at Social Security full (normal) retirement age (SSNRA)vi | $4,018 | $3,822 | $3,627 |
| National average wage base used to adjust limits | $66,621.80 | $63,795.13 | $60,575.07 |
| IRS qualified employer health insurance plan benefit limits | 2025 | 2024 | 2023 |
| Self-only health insurance plan coverage | |||
| Health savings account (HSA) annual contributionvii | $4,300 | $4,150 | $3,850 |
| High-deductible health plan (HDHP) minimum deductibleviii | $1,650 | $1,600 | $1,500 |
| HDHP maximum out-of-pocket cost | $8,300 | $8,050 | $7,500 |
| Family health insurance plan coverage | |||
| HSA annual contribution | $8,550 | $8,300 | $7,750 |
| HDHP minimum deductible | $3,300 | $3,200 | $3,000 |
| HDHP maximum out-of-pocket cost | $16,600 | $16,100 | $15,000 |
| All health insurance plan coverages | |||
| HSA “catch-up” contribution for ages 55 and older | $1,000 | $1,000 | $1,000 |
New limits under SECURE 2.0
SECURE 2.0 permits DC plans that offer catch-up contributions to provide larger catch-up limits for participants aged 60, 61, 62, or 63 beginning in 2025. The limit is the greater of $10,000 or 150% of the regular catch-up limit, as indexed for inflation.
Plans that allow catch-up contributions for participants whose wages (as defined in IRC §3121(a)) in the prior calendar year exceeded $145,000 must require the catch-up contributions to be made on a Roth basis. The $145,000 will be indexed for inflation. Originally effective for taxable years beginning after December 31, 2023, the IRS announced a two-year administrative transition period, giving plans until December 31, 2025, to implement the new rule.
Please visit our website to learn more about how SECURE 2.0 changes retirement savings. The site contains numerous articles and podcasts to help you navigate the new law.
For additional information about the 2025 cost-of-living adjustments for retirement plans, Social Security benefits, and HSAs and HDHPs, please contact your Milliman consultant.
Sources: IRS Notice 2024-80, 2025 Social Security Fact Sheet, Social Security National Average Wage Index, PBGC Premium Rates, IRS Revenue Procedure 2024-25
i The maximum annual DB plan annuity is specified under Internal Revenue Code (IRC) §415(b)(1)(A) and may need an actuarial adjustment if the retirement date is before age 62 or after age 65, or if the participant’s elected form of payment is not a single life annuity.
ii The maximum annual additions to a DC plan are specified under IRC §415(c)(1)(A) and are the sum of any employee pre-tax or Roth elective deferral contributions (excluding catch-up contributions), employee non-Roth after-tax contributions, employer contributions (matching, profit-sharing, or other nonelective), and any reallocated forfeitures.
iii The employee’s annual DC plan limit on elective deferral contributions is specified under IRC §402(g)(1)(B) applicable to 401(k) and 403(b) plans, with an identical-but-separate limit under IRC §457(e)(15)(A) as applicable to 457(b) plans.
iv “UVB” in the PBGC section of the table refers to Unfunded Vested Benefits for single-employer and multiple- employer DB plans. It is the deficit, if any, between the PBGC VRP value of accrued benefits and the value of the plan’s assets. There are no VRPs for multiemployer DB plans.
v “OASDI” is the Social Security Old-Age, Survivors, and Disability Insurance program. The OASDI payroll tax rate is 6.20% on wages up to the Taxable Wage Base. Both the employer and the employee pay OASDI payroll tax.
vi An individual who attains the SSNRA of 66 and 10 months in 2025 (i.e., born in 1959) will be eligible to commence unreduced Social Security benefits in 2025. People born prior to 1959 have a lower SSNRA, and the SSNRA is 67 for those born in 1960 or later.
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2025 COLA indexed amounts: IRS limits for employer-sponsored retirement and health plans, Social Security benefits, and PBGC premiums
Our latest client action bulletin details the 2025 IRS limits for employer-sponsored retirement and health plans, Social Security thresholds and PBGC premiums.