The 2025 cost-of-living adjustments (COLAs) will not have much effect on most IRA owners. IRA contribution amounts for 2025 stay the same as for 2024, even while other indexed limits have risen slightly. But there are some important changes for 2025, some of which may affect you. For example, starting in 2025, those who attain age 60 – 63 during the year are permitted to defer 50% more into their retirement plan. This increase includes SIMPLE IRA plans (although the increase is smaller). The following charts will help you stay compliant with your IRAs and other retirement accounts, whether your concerns relate to contribution or deduction amounts or to other eligibility questions. As always, you should seek sound professional advice with your specific retirement plan inquiries.
TRADITIONAL AND ROTH IRAs
HOW MUCH CAN I CONTRIBUTE TO AN IRA?
You are allowed to contribute 100% of your compensation to your IRA—up to the annual contribution limit. If you don’t have earned income but your spouse does, you may still be able to contribute. And if you have reached age 50 in any tax year, you may also make an additional “catch-up contribution” each year. For 2025, the contribution limits remain the same as for 2024.
Traditional & Roth IRA Contributions
2025
2024
2023
Contribution Limit
$7,000
$7,000
$6,500
Catch-up Contribution
$1,000
$1,000
$1,000
WHO CAN DEDUCT A TRADITIONAL IRA CONTRIBUTION?
If either you or your spouse participates in an employer-sponsored retirement plan, this may affect whether you can deduct your Traditional IRA contribution. You should seek competent tax advice to determine whether you can deduct, but the following table shows the modified adjusted gross income (MAGI) ranges that apply.
Income Limits for Deducting a Traditional IRA Contribution
2024
2024
2023
Single filers participating in an employer's retirement plan
$79,000 - $89,000
$77,000 - $87,000
$73,000 - $83,000
Married, filing a joint tax return, and participating in an employer's retirement plan
$126,000 - $146,000
$123,000 - $143,000
$116,000 - $136,000
Married, filing a joint tax return, and your spouse is participating in an employer's retirement plan, but you are not
$236,000 - $246,000
$230,000 - $240,000
$218,000 - $228,000
Married, filing a separate tax return
$0 - $10,000
$0 - $10,000
$0 - $10,000
Let’s say you are 40 years old, married, and filing a joint tax return for 2025. If you participate in a 401(k) plan at work, your IRA deduction is based on your MAGI. If it’s over $146,000, you cannot deduct your contribution. If your MAGI is under $126,000, you may fully deduct it. And if your MAGI is between $126,000 and $146,000, you can deduct part of the $7,000 limit.
WHO CAN CONTRIBUTE TO A ROTH IRA?
Modified adjusted gross income also determines whether you can contribute to a Roth IRA. If your MAGI is greater than the limits in the chart below (based on your marital status), you cannot make a Roth contribution. If it’s less than the limit, you may contribute the full Roth IRA amount. And if your MAGI is within the threshold range, you are eligible for a partial contribution.
Income Limits for Contributing to a Roth IRA
2025
2024
2023
Single filer
$150,000 - $165,000
$146,000 - $161,000
$138,000 - $153,000
Married, filing a joint tax return
$236,000 - $246,000
$230,000 - $240,000
$218,000 - $228,000
Married, filing a separate tax return
$0 - $10,000
$0 - $10,000
$0 - $10,000
SEP, SIMPLE, & 401(k) PLANS
SEP PLAN CONTRIBUTION LIMITS
In a simplified employee pension (SEP) plan, the employer makes contributions to the Traditional IRA of eligible employees. The employer may contribute up to 25% of an employee's compensation, but it cannot exceed the dollar limit below. If you earn more than the compensation cap amount, your earnings over that amount cannot be considered when your employer makes a contribution.
SEP IRA Plan
2025
2024
2023
Minimum Compensation to Be Eligible
$750
$750
$750
Maximum Employer Contribution
$70,000
$69,000
$66,000
Compensation Cap
$350,000
$345,000
$330,000
SIMPLE IRA PLAN CONTRIBUTION LIMITS
Two types of contributions may be made through a SIMPLE IRA plan. First, eligible employees may defer their compensation into a SIMPLE IRA, up to the annual limit. (Those age 50 and older can make additional catch-up contributions.) But as mentioned above, starting in 2025 employees who turn 60, 61, 62, or 63 during the year may increase their deferral by 50% (see below). In addition, employees of small employers (25 or fewer employees) may defer 10% more than the previous year’s deferral limit. Employees of businesses with 26 to 100 employees may make this additional deferral only if the employer makes supplemental contributions. (This special increase also applies to age 50 catch-up contributions. So the additional catch-up amount is $350 for 2025.)
Second, the employer generally must make either a 3% matching contribution or a 2% contribution to all eligible employees. If the employer has 26 – 100 employees and makes a supplemental contribution—either a 4% match or a 3% profit-sharing contribution—then participants may also make the additional 10% deferral if they choose.
SIMPLE IRA Plan
2025
2024
2023
Maximum Employee Contribution
$16,500 ($17,600 if special 10% increase applies)
$16,000
$15,500
Age 50 Catch-Up Contribution
$3,500 ($5,250 if age 60 – 63 increase applies)
$3,500
$3,500
401(k) PLAN CONTRIBUTION LIMITS
The following limits apply to 401(k) plans, 403(b) plans, and governmental 457(b) plans. The age 60 – 63 catch-up limit applies, starting in 2025.
Employer Retirement Plan
2025
2024
2023
Maximum amount of compensation considered for contribution calculations (compensation cap)
$350,000
$345,000
$330,000
Maximum amount of salary you may defer into the plan
$23,500
$23,000
$22,500
Maximum age 50 catch-up contribution (in addition to the salary deferral limit and total plan limit)
$7,500 ($11,250 if age 60 – 63 increase applies)
$7,500
$7,500
Total plan contribution limit
$70,000
$69,000
$66,000
Highly compensated employee compensation threshold for nondiscrimination testing
$160,000
$155,000
$150,000
Key employee compensation threshold for nondiscrimination testing
$230,000
$220,000
$215,000
Maximum compensation subject to Social Security taxes
$176,100
$168,600
$160,200
MISCELLANEOUS LIMITS
The amount that can be excluded from income in 2025 through a qualified charitable distribution (QCD) has been increased to $108,000 (from $105,000 for 2024). The QCD amount that can be paid directly to a split-interest entity (in a one-time election) is increased to $54,000 (from $53,000). The penalty-free distribution (from an employer plan or IRA) for a victim of domestic abuse is increased to $10,300 (from $10,000)
MORE RESOURCES
You can find more information on COLAs, contributions, retirement plans, and more in our Self-Directed IRA Knowledge Center. You can view the full news release for 2025 COLA changes on the IRS website. Download STRATA's IRA Annual Limits Chart for a quick comparison of this year's IRS COLA changes. Our financial calculators can also help you choose the best option for your retirement savings.
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