2025 IRA Contribution and Income Limits

If you use traditional or Roth IRAs to save for retirement, the IRS has stated that IRA contribution limits for the 2025 tax year remain unchanged from 2024. The total annual contribution limit for individual retirement accounts (IRAs) in 2025 is $7,000, and those aged 50 and older can contribute an additional $1,000, bringing their total to $8,000.

The earned income and gross income ranges on IRAs are also higher in 2025, allowing you to earn more money and still leverage the tax advantages of the plan. (Workplace retirement plans such as employer-sponsored retirement plans like 401(k)s and 403(b)s also received slight increases due to annual adjustments.) Here’s what you need to know to maximize your retirement savings in 2025.

2025 IRA Contribution Limits

For all types of IRAs, you can contribute up to $7,000 in 2025 ($8,000 if you’re 50 and older).

The annual limit on a SIMPLE IRA, another workplace plan, has increased to $16,500, up from $16,000 in 2024. Remember, if you pay IRA brokerage fees, the cost counts toward your annual contribution limit.

2025 IRA Income Limits

The ability to contribute the maximum contribution to a Roth IRA depends on your modified adjusted gross income (MAGI) and tax filing status. For example, singles who make less than $150,000 annually can contribute the full $7,000, but singles who make more than $165,000 cannot contribute anything to an IRA. Below are the updated limits for 2025.

Filing status	Maximum Income for Full Contribution to Roth IRA	Partial Contribution	No Contribution Allowed
Single Filers, Head of Household	Less than $150,000	Between $150,000 and $165,000	$165,000 or more
Married filed jointly	Less than $236,000	Between $236,000 and $246,000	$246,000 or more

If you put money into a traditional IRA, you may be able to take a tax deduction for some or all of your traditional IRA contributions, depending on your taxable income and whether you are covered by an employer-sponsored retirement plan.

Filing status	Maximum Income for Full Deduction to Traditional IRA	Partial Deduction	No Contribution Allowed
Single Filers, Head of Household	Up to $79,000	Between $79,000 and $89,000	$89,000 or more
Married Filing Jointly (covered by a workplace plan)	Up to $126,000	Between $126,000 and $146,000	$146,000 or more

If your spouse is covered by a workplace plan but you are not, the deduction phases out if your joint taxable compensation is between $236,000 and $246,000, up from between $230,000 and $240,000 in 2024.

IRA Contributions for High-Income Earners

If you exceed the Roth IRA contribution limits, you may consider a backdoor IRA strategy. This allows high-income earners to make nondeductible traditional IRA contributions and convert those funds to a Roth IRA. 

Backdoor IRAs comply with IRS rules, though we recommend chatting with your financial advisor to formulate a smart retirement strategy based on your income and retirement goals. If you’re interested in a broader range of investments, consider a Gold IRA or other self-directed IRA. Consult with a tax advisor to ensure compliance with IRS rules.

2025 Spousal IRA Contributions

Two spouses generating earned income from employment (not investment and other passive income) can each have a separate IRA. Each partner can contribute up to $7,000 ($8,000 if over 50). The combined household maximum contribution is $14,000 or $16,000, depending on age.

Spouses who are not employed can still establish a traditional IRA if the other spouse is working. Married couples qualify for spousal IRA contributions if they file a joint return.

What About 401(k) Contribution Limits?

Contribution limits for employer-sponsored retirement plans, including 401(k), 403(b), most 457 plans, and the Thrift Savings Plan, increased by $500 for 2025. Eligible taxpayers can contribute $23,500 to these accounts in 2025.

For those 50 and older, the catch-up contribution remains unchanged at $7,500, meaning you can contribute up to $31,000 if you qualify for the age limit.

Rollovers and FDIC-Insured Accounts

IRA accounts can be transferred through rollovers if you change employers or want to consolidate your retirement savings. Ensure your IRA brokerage or financial institution is FDIC-insured to protect your assets.

If You Overcontribute to an IRA

If you exceed the annual contribution limit, the excess amount is subject to a 6% income tax penalty as long as the funds remain in your account.

• To avoid the tax, you must withdraw the excess amount and any associated investment income before your tax filing deadline. Include Form 5329 with your tax return.
• If you discover the overage after filing your return, you have six months to file an amended return to correct it. After that time, you will pay the 6% penalty.
• Alternatively, you can apply the excess contribution to the following year. This strategy, called recharacterization, wipes out the overage. Just be sure to adjust contributions for the next year.

Bottom Line: Using an IRA to Save for Retirement

Opening an IRA account is a great way to build retirement savings. IRA contributions are tax-deductible in traditional IRAs, while Roth IRA distributions are tax-free in retirement. However, the age limit, contributions, and eligibility restrictions above apply.

IRS guidelines are fairly straightforward for most people; you should speak to a financial advisor to ensure you maximize your savings while avoiding taxes or penalties—especially if you are self-employed or have unusual tax circumstances.