Maximizing Your Roth IRA
“I can’t change the direction of the wind, but I can adjust my sails to always reach my destination.”
As we navigate through 2025, it's essential to stay informed about the latest updates regarding Roth IRA contributions. Understanding the contribution limits, recent changes, and deadlines can help you make the most of your retirement savings.
Contribution Limits for 2025
For the 2025 tax year, the maximum contribution limit for Roth IRAs remains at $7,000 for individuals under the age of 50. If you're 50 or older, you can take advantage of the catch-up contribution, allowing you to contribute an additional $1,000, bringing the total to $8,000.
Recent Changes
While the contribution limits themselves have not changed, there have been adjustments to the income phase-out ranges for 2025. These ranges determine your eligibility to contribute to a Roth IRA based on your modified adjusted gross income (MAGI):
Single Filers: The income limit for making a full Roth IRA contribution is now under $150,000, up from $146,000 in 2024. The phase-out range for partial contributions is between $150,000 and $165,000. If your income exceeds $165,000, you are ineligible to contribute directly to a Roth IRA.
Married Filing Jointly: For those filing jointly, the income limit for making a full contribution is under $236,000, up from $230,000 in 2024. The phase-out range for partial contributions is between $236,000 and $246,000. If your income exceeds $246,000, you are ineligible to contribute directly to a Roth IRA.
Married Filing Separately: Roth IRA contribution limits are particularly strict for married couples filing separately in 2025. If they lived with their spouse at any time during the year, they can only contribute if their modified adjusted gross income (MAGI) is below $10,000. Contributions are completely phased out for those with a MAGI of $10,000 or more.
Contribution Deadlines
You can make a Roth IRA contribution for a given tax year anytime between January 1 and the tax-filing deadline of the following year. For the 2024 tax year, the deadline to make contributions to a Roth IRA is April 15, 2025. For the 2025 tax year, the deadline to make your Roth IRA contribution is April 15, 2026. It's advisable to contribute as early as possible to take full advantage of the tax-advantaged compounding power of IRAs.
Action Items
Staying informed about the latest changes in Roth IRA contribution limits and deadlines can help you maximize your retirement savings. By understanding these updates and planning accordingly, you can continue to build a secure financial future. If you find yourself ineligible to contribute directly to a Roth IRA, consider other retirement savings options, such as traditional IRAs or backdoor Roth IRA conversions.
Maximizing your Roth IRA contributions requires staying up-to-date with the latest limits, changes, and deadlines. By contributing early and understanding the income phase-out ranges, you can make the most of your retirement savings and ensure a financially secure future.
If you want to make a 2024 Roth IRA contribution before the April 15th deadline or start one for 2025, fill out this simple application and we’ll help you open up your account.
~Alex
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