When working on a comprehensive financial plan, it’s always a good time to check in and make sure you’ve buttoned up your retirement contributions to maximize your savings opportunities.
The IRS recently updated the limits for this year, which could positively impact your ability to save for the future so you can keep your traditions going for many years to come. With that in mind, we’ve gathered some of the updated contribution limits for common accounts, including Traditional IRAs, Roth IRAs, SEPs, SIMPLE IRAs, and employer-sponsored accounts like 401(k)s, 457s, 403(b)s, and the TSP.
Traditional Individual Retirement Accounts (IRA) and Roth IRAs
These accounts remain good options for people looking to grow their retirement savings while enjoying potential tax advantages. For 2025, the annual contribution limit for both Traditional and Roth IRAs is $7,000 for individuals under 50 years old, which is the same as 2024. For those aged 50 and older, the catch-up contribution limit remains at an additional $1,000, allowing a maximum contribution of $8,000.
Traditional and Roth IRAs | 2025 | 2024 |
Under Age 50 Limit | $7,000 | $7,000 |
Catch-Up Amount | $1,000 | $1,000 |
Age 50 and Over Limit | $8,000 | $8,000 |
There are different strategies for tax efficiency when considering Traditional IRAs versus Roth IRAs, so be sure to ask us how these accounts can work within your financial plan. It’s easy to overlook the importance of the tax location of our assets in the accumulation phase and try to maximize deductions as much as possible. This strategy can sometimes lack the foresight of tax efficiency, which may mean paying more in taxes upfront, but saves on taxes paid over your lifetime.
Created in the 1990s, the Roth IRA is regarded as one of the most powerful tools available to Americans in planning for tax efficiency. It is one of the main account types where, because your contributions are made with after-tax dollars, you won’t have to pay the IRS again down the line when taking of-age distributions.
Not everyone can take advantage of these accounts as there are certain income limits to be considered, so if you’re outside those limits, we can delve into some of the other strategies available to you. If you’d like help determining which account types are best for your financial goals, let’s connect!
Note: Don’t forget to scroll to the bottom for the IRS income limits on the deductibility of Traditional IRA contributions or the ability to make Roth contributions!
SIMPLE IRAs
SIMPLE IRAs have also received an increased limit for this year, with the 2024 limit being raised to $16,000 and the 2025 limit rising again to $16,500. The catch-up contributions remain the same from 2024 to 2025, with individuals over age 50 being allowed a catch-up amount of $3,500. These accounts are unique in that employers are required to contribute to them on behalf of their employees in the form of a match or an across-the-board flat percentage.
SIMPLE IRAs | 2025 | 2024 |
Under Age 50 Limit | $16,500 | $16,000 |
Catch-Up Amount | $3,500 | $3,500 |
Age 50 and Over Limit | $20,000 | $19,500 |
Simplified Employee Pension (SEP) IRA
SEP IRAs, commonly used by self-employed individuals and small business owners, are subject to their own rules and work a little differently. Employers are allowed to contribute up to the lesser of: 25% of compensation or $70,000 for 2025. Accounts with higher limits like these can be particularly beneficial for those with variable incomes or seeking to contribute more substantially toward retirement.
SEP IRAs | 2025 | 2024 |
Under Age 50 Limit | Lesser of $70,000 or 25% | Lesser of $69,000 or 25% |
Catch-Up Amount | None | None |
Age 50 and Over Limit | Lesser of $70,000 or 25% | Lesser of $69,000 or 25% |
Reminder! Only employers can add to these accounts. The employee cannot add to their own account as a salary deferral. Also, note that there are no catch-up contributions for SEP IRAs. The limit is the same, regardless of the age of the employee.
If you’re looking at starting a retirement plan for your solo-preneur business, you may want to compare the benefits of a Solo 401(k) versus a SEP IRA. There are nuances to how these accounts work, so it may be best to enlist the help of a financial professional to discuss what’s best for your specific situation. Reach out to us if you’d like some guidance!
401(k), 457, 403(b), and TSP Plans
Employer-sponsored retirement plans are popular retirement savings vehicles. However, many people forget they can contribute more than an employer matches into these accounts! If you have the capacity to contribute more but don’t know if you can, check with your employer — they can help steer you in the right direction to avoid missing out on any potential additional contributions.
The annual contribution limit for 2024 was $23,000, and has been raised to $23,500 for 2025. Additionally, the catch-up contribution limit for individuals aged 50 and over is $7,500, allowing a total contribution of $30,500 for 2024 and $31,000 for 2025. Additionally, for tax year 2025 the IRS has allowed for a higher catch-up limit for those age 60, 61, 62, or 63 as outlined in the table below.
It's important to take advantage of employer matches and consider maximizing contributions to benefit from potential tax advantages and employer contributions.
It's important to note that contributions to your 401(k) plan could impact the tax deductibility of any IRA contributions. As a reminder, please see the MAGI Limits section at the bottom of this article and talk with your tax professional for more details regarding the nuances there.
401(k), 457, 403(b), and TSP Plans | 2025 | 2024 |
Under Age 50 Limit | $23,500 | $23,000 |
Age 50 and over Catch-Up Limit | $7,500 | $7,500 |
Age 60, 61, 62, 63 Catch-Up Limit | $11,250 total (not in addition to the $7,500 listed above) | N/A |
Other Relevant Accounts
Beyond these primary retirement accounts, there may be other avenues for savings, income planning, and investment, such as Health Savings Accounts (HSAs), self-funded pension plans, insurance-based solutions, other employer-based plans, etc.
If you have questions regarding your specific financial situation, we’re happy to have a conversation. We can also work in tandem with CPAs to tailor recommendations to our clients’ unique needs.
Income Limitations for Deductibility
While we’re on the topic of tax nuances, there are also income limitations to the deductibility of IRA contributions. To brace against any surprises as we enter tax season, compare your estimated Modified Adjusted Gross Income (MAGI) to the chart below to see how your income and access to employer-sponsored plans affect your ability to deduct your Traditional IRA contributions. Those falling within the listed income brackets may need to calculate for partial deductibility. If your MAGI is below the income limits, then you should be able to benefit from a full deduction of your contributions.
MAGI Limits - Traditional IRAs | 2025 | 2024 |
Single or Head of Household | $79,000–$89,000 | $77,000–$87,000 |
Married filing jointly; you participate in an employer-sponsored plan | $126,000–$146,000 | $123,000–$143,000 |
Married filing jointly; your spouse participates in an employer-sponsored plan | $236,000–$246,000 | $230,000–$240,000 |
Married Filing Separately | Less than $10,000 - partial based on MAGI | Less than $10,000 - partial based on MAGI |
Income Limits for Roth IRA Contributions
The IRS also has income limits for making Roth IRA Contributions. Below the range, you may take advantage of the full contribution limit. If your MAGI is within the listed range, you may make a partial contribution, but if your MAGI exceeds the limits at the top of the range, then you are not allowed to contribute to a Roth IRA. These limits are specifically for stand-alone Roth IRAs and are not applicable for Roth contributions within 401(k) plans. For those married but filing separately, ROTH IRA contributions are not permitted for individuals making $10,000 or more annually.
MAGI Limits - Roth IRA | 2025 | 2024 |
Single or Head of Household | $150,000–$165,000 | $146,000–$161,000 |
Married filing jointly | $236,000–$246,000 | $230,000–$240,000 |
If you cannot contribute to a Roth due to these income limits and you would still like to achieve tax-free growth of your assets, there are strategies we can talk about to work toward that goal. If you would like to fast-track diversifying the taxability of your portfolio, Roth conversions could also be a topic to investigate. As always, if you’ve been thinking about these strategies and aren’t sure if they could be useful to you, just ask! Everyone’s situation is different, and having a professional take a look could help you decipher the details.
The Bottom Line on Retirement Contribution Limits
Do all these charts seem to just add to the confusion? Maybe you’re feeling like you can understand the guidelines, but not how you should be implementing the various accounts into your own savings strategy. These are common questions we hear from many of our clients. It would be easy to plan if life was static, but the seasons of life bring new people, stressors, and goals — your financial strategy should adjust along with you.
If you’d like some help sorting through what these charts mean for your effective retirement savings strategy, reach out to us. We’d love to help you sort through what options are available to you and how you can plan to best utilize your retirement savings options.
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