Contact your dedicated NADA Retirement Director today Todd Adrian I 970-581-3548633 I Todd.Adrian@empower.com As they do each fall, the IRS recently announced adjustments affecting the dollar limitations on 401(k) plans, IRAs, and other retirement-related items for tax year 2025. The changes from 2024 to 2025 are summarized below. The contribution limit for employees who participate in their 401(k) plan increased to $23,500, with the catch-up contribution limit remaining at $7,500 for employees age 50 and up. IRA contributions remained at $7,000, with a catch-up contribution limit of $1,000. For lower- and moderate-income employees, the income limit for the saver’s credit will increase to $79,000 for married couples filing jointly and $39,500 for singles. As a business owner and plan sponsor, you may find that a few key changes could impact your personal situation: • The Annual Compensation Limit affecting 401(k) plans has been increased to $350,000. • The Limitation for Defined Contribution Plans has been increased to $70,000. • The maximum amount of earnings subject to the Social Security tax (taxable maximum) will increase from $168,600 to $176,100. This was brought to you by the NADA Retirement Program from Empower, our partner for dealership 401(k) solutions. Empower provides service excellence, constant innovation, thought leadership and outstanding people to help plan sponsors and participants get involved in and help plan for their financial future. The National Automobile Dealers Association and Empower have created a unique relationship through which Empower offers flexible, competitive 401(k) plans with an award-winning service model and fiduciary support at a negotiated NADA member price. If you work with a local financial professional, be sure to ask them about the NADA Retirement Program or visit nadaretirement.com. Description 2024 2025 Maximum Pretax 401(k) Contribution (not including catch-up contributions for participants age 50 and older) $23,000 $23,500 Catch-Up Contribution Limit (for participants age 50 or older) $7,500 $7,500 Annual Addition Dollar Limit (not including catch-up contributions for participants age 50 and older) $69,000 $70,000 Compensation Limit $345,000 $350,000 Compensation Limit for Highly Compensated Employees $155,000 $160,000 Compensation Limit for Key Employee Officers $220,000 $230,000 Social Security Wage Base $168,600 $176,100 Securities, when presented, are offered and/or distributed by Empower Financial Services, Inc., Member FINRA/ SIPC. EFSI is an affiliate of Empower Retirement, LLC; Empower Funds, Inc.; and registered investment adviser Empower Advisory Group, LLC. This material is for informational purposes only and is not intended to provide investment, legal, or tax recommendations or advice. “EMPOWER” and all associated logos and product names are trademarks of Empower Annuity Insurance Company of America. ©2024 Empower Annuity Insurance Company of America. All rights reserved. 460000-FLY-WF-3761497-1124 RO4045318-1124 12 SAN DIEGO DEALER
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