2025 IRA Contribution Limits: What You Need to Know
As we head into 2025, the IRS has released the updated contribution limits for Individual Retirement Accounts (IRAs). Whether you’re planning for retirement with a traditional IRA or a Roth IRA, understanding these limits can help you maximize your tax advantages and grow your savings more efficiently.
2025 IRA Contribution Limits
The contribution limits for IRAs remain unchanged from 2024:
- Standard Contribution Limit: $7,000
- Catch-Up Contribution (for individuals 50 and older): An additional $1,000, for a total of $8,000
These limits apply to both traditional and Roth IRAs combined. In other words, this means if you contribute to both types, your total contributions cannot exceed these amounts.
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Roth IRA Income Limits for 2025
Not everyone qualifies to contribute to a Roth IRA. Your ability to contribute depends on your modified adjusted gross income (MAGI) and filing status:
- Single Filers & Heads of Household: Contribution phases out between $150,000 and $165,000
- Married Filing Jointly: Contribution phases out between $236,000 and $246,000
If your income falls within these ranges, you may only be able to contribute a reduced amount. If your income exceeds the upper limit, you’re not eligible to contribute to a Roth IRA directly (but you may still have options, such as a Backdoor Roth IRA strategy).
Traditional IRA Deduction Limits for 2025
Contributions to a traditional IRA may be tax-deductible, but if you (or your spouse) have access to a workplace retirement plan, your deduction may be limited based on your income:
- Single Filers Covered by a Workplace Retirement Plan: Deduction phases out between $79,000 and $89,000
- Married Filing Jointly (Spouse Covered by a Workplace Plan): Deduction phases out between $126,000 and $146,000
- Married Filing Jointly (IRA contributor is not covered, but spouse is): Deduction phases out between $236,000 and $246,000
If your income falls within these phase-out ranges, you may only be able to deduct part of your contributions. If your income exceeds the limit, your contributions won’t be deductible, but you can still contribute to an IRA and benefit from tax-deferred growth.
Key Takeaways for Your Retirement Planning
- The 2025 IRA contribution limits remain the same as 2024, with a max contribution of $7,000 (or $8,000 if you’re 50 or older).
- Roth IRA contributions are limited based on income—if you earn too much, you may need to explore alternative strategies.
- Traditional IRA contributions may be deductible, but the deduction depends on whether you or your spouse have a retirement plan at work.
- Even if your contributions are not deductible, IRAs still provide valuable tax advantages and long-term growth opportunities.
Need Help Maximizing Your Retirement Strategy?
IRA rules can be complex, especially when tax planning is involved. At Whittaker CPAs, we help individuals and business owners optimize their retirement savings strategies, ensuring they maximize tax benefits while staying within IRS guidelines.
If you’d like to review your retirement plan for 2025, schedule a consultation with us today!
