Planning for retirement starts with understanding how much you can contribute to your IRA each year. Since the IRS updates these limits annually to keep up with inflation, staying informed is key to making the most of your savings.
In 2025, IRA contribution limits have changed again, giving you another chance to maximize your tax-advantaged savings. Whether you’re contributing to a Traditional IRA or a Roth IRA, knowing these limits can help you stay on track with your retirement goals.
Let’s break down the 2025 IRA contribution limits, what they mean for you, and how you can make the most of them while staying compliant.
What is an IRA?
Before diving into the numbers, let’s quickly review what an IRA is. An Individual Retirement Account (IRA) is a type of tax-advantaged account designed to help you save for retirement. There are two main types:
- Traditional IRA: Contributions may be tax-deductible, and earnings grow tax-deferred until you withdraw them in retirement.
- Roth IRA: Contributions are made with after-tax dollars, but qualified withdrawals are tax-free.
You can generally contribute to either one (or both), but the total contribution across all IRAs must stay within the annual limit.
Traditional and Roth IRA contribution limits 2025
For the tax year 2025, the contribution limits for both Roth and Traditional IRAs remain consistent with prior years. The IRS has set the following limits this year.
- Under age 50: You can contribute up to $7,000 per year
- Age 50 & older (Catch-up contribution): You can contribute an additional $1,000 as a catch-up contribution, bringing the total to $8,000
These limits apply to the combined total of contributions across all your IRAs.
For example, if you have both a Roth and a Traditional IRA, your total contributions to both accounts cannot exceed $7,000 (or $8,000 if you’re 50 or older).
A. Roth IRA contribution limits
Roth IRAs are funded with after-tax dollars, meaning you won’t get a tax deduction for your contributions. However, qualified withdrawals during retirement are tax-free. Here’s what you need to know about Roth IRAs in 2025:
Contribution rules
- After-tax contributions: You contribute with money that’s already been taxed. Roth IRAs don’t offer an upfront deduction.
- Income limits apply: Your contribution limit may be reduced or eliminated if your income exceeds the IRS phase-out thresholds.
- Tax-free withdrawals: Qualified withdrawals in retirement are tax-free, as long as you meet holding period and age requirements.
Income limits
Your eligibility to contribute to a Roth IRA depends on your Modified Adjusted Gross Income (MAGI) and filing status:
B. Traditional IRA Contribution Limits
Traditional IRAs allow you to contribute pre-tax dollars (in most cases), which can reduce your taxable income. However, withdrawals in retirement are taxed as ordinary income.
Contribution rules
- No income limits: If you have earned income, you can contribute to a Traditional IRA—regardless of how much you make.
- Potential tax deductions: Your contribution may be fully, partially, or non-deductible based on your income and whether you (or your spouse) are covered by a workplace retirement plan.
- Tax-deferred growth: You won’t pay taxes on earnings until you begin making withdrawals in retirement, subject to IRS rules.
Income limits
If you or your spouse are covered by a retirement plan at work, your ability to deduct contributions to a Traditional IRA depends on your Modified Adjusted Gross Income (MAGI) and tax filing status.
If you are covered by a workplace retirement plan:
If you are not covered by a workplace plan but your spouse Is:
If neither you nor your spouse is covered by a retirement plan at work, you can deduct the full amount of your Traditional IRA contribution, regardless of your income.
Examples to understand IRA contribution limits
To better understand how these limits work in practice:
1. Roth IRA Example:
If you’re single with a MAGI of $155,000 in 2025 and under age 50: Your Roth IRA contribution limit will be reduced based on IRS phase-out rules.
If you’re married, filing jointly with a MAGI of $240,000: You can make only partial contributions to a Roth IRA.
2. Traditional IRA Example:
If you’re married filing jointly with a MAGI of $130,000, and covered by a workplace plan: Your Traditional IRA contributions will be partially deductible.
How to open an IRA account on Public.com
Public is an investor-friendly platform that simplifies the process of opening and managing IRA accounts. Whether you’re looking to build long-term retirement savings or roll over an existing IRA, Public.com offers a transparent and easy-to-use experience. Here’s how to get started:
1. Sign up for an IRA account on Public
To open an IRA, visit Public.com or download the Public app on iOS or Android. The platform provides a seamless onboarding process, guiding you through account setup and helping you understand your investment options.
2. Fund your IRA account
Once your IRA is set up, you can start contributing by:
- Linking a Bank Account: Transfer funds securely via ACH or debit card.
- Rolling Over an Existing IRA or 401(k): If you have a retirement account with another provider, Public.com supports rollovers, allowing you to consolidate and manage your investments in one place.
3. Set up contributions for long-term growth
To stay on track with your retirement savings goals, you can choose:
- One-Time Deposits: Make individual contributions whenever it fits your financial plan.
- Automatic Contributions: Set up recurring deposits to ensure consistent contributions over time, helping to maximize potential tax benefits and long-term growth.
4. Invest and manage your IRA with Public.com
Public offers a user-friendly platform to help you build and manage a diversified retirement portfolio. You can invest in:
- Stocks, ETFs, and Bonds to align with your risk tolerance, investment horizon, and long-term retirement goals.
- Research and Analytical Tools that provide real-time market data, expert insights, and community discussions to support informed decision-making.
5. Monitor your retirement progress
Public provides an intuitive dashboard where you can:
- Track investment growth and make adjustments as needed.
- Stay informed with real-time market data, analyst insights, and community discussions.
- Align your strategy with long-term retirement planning goals.
By leveraging Public’s platform, investors can efficiently manage their Traditional IRA and Roth IRA accounts, take advantage of tax-deferred growth, and build a strong foundation for retirement. Get started today!
Conclusion
Understanding your IRA contribution limits for 2025 helps you stay within IRS rules and better structure your retirement savings. Whether you’re contributing to a Roth IRA, a Traditional IRA, or both, these limits play a key role in your long-term planning.
If you’re looking for a platform to manage your IRA effectively, consider opening an IRA with Public. Public offers unique features like a 1% match on annual contributions and access to thousands of investment options including stocks, ETFs, bonds, and even options trading. Plus, with rollover bonuses of up to $10,000 and built-in protections from SIPC, Public provides a robust solution for your retirement savings.
