The primary factors for determining your contribution limit are your filing status and modified adjusted gross income (MAGI), which is your income after considering certain allowable deductions and tax penalties. Based on these factors, you may be eligible to contribute the maximum, a reduced amount, or nothing at all.

Contributions to a Roth individual retirement account (IRA) are made post-tax, but all earnings grow tax-free. Withdrawals of the contributions made during retirement are made tax-free. However, only earned income can be contributed to a Roth individual retirement account (Roth IRA).

Roth IRA contributions are limited and can be reduced or phased out, depending on your annual income.

Income Limits

The tables below highlight the maximum amount of income you can earn before being ineligible to contribute to a Roth and the income phaseout ranges where your contributions are reduced.

Example of How a Reduced Limit Is Calculated

Below is an example of how the reduced limit is calculated for someone who is filing as single, 澳洲幸运5官方开奖结果体彩网:head of household, or 澳洲幸运5官方开奖结果体彩网:married and filing separately for 2025 (and yꦉou didn’t live with your spouse at any time during the year):

1. Start with your modified 2025 AGI.
2. Subtract either: $236,000 if you're filing jointly, or $150,000 if filing as single
3. Divide the result by $15,000.
4. Multiply by your maximum contribution limit.
5. Subtract the result of #4 from the maximum contribution limit.
   

Please note that the divisor (in step #3) of $15,000 is set by the 澳洲幸运5官方开奖结果体彩网:Internal Revenue Service (IRS), depending on your tax filing status. If your return is filed as 澳洲幸运5官方开奖结果体彩网:married filing jointly or as a 澳洲幸运5官方开奖结果体彩网:widow/widower, then you will use $10,000 as the divisor. Visit the IRS website for more information or if you're filing as something other 🅠than married or single.

1. 2025 MAGI: $141,000
2. $153,000 - $150,000 = $3,000
3. $3000 ÷ $15,000 = 0.2
4. 0.2 * $7,000 = $1,400
5. $7,000 - $1,400 = $5,600

Using the example information above, the calculated reduced limit would be $5,600 for this individual.

Details of Roth IRA Contributions

The Roth IRA has contribution limits are $7,000 for both 2024 and 2025. If you’re age 50 or older, you can contribute an additional $1,000 as a catch-up contribution. Contributions, not earnings, can be withdrawn tax-free at any time.

It’s worth noting that you can have both a Roth and a 澳洲幸运5官方开奖结果体彩网:traditional IRA and contribute to both, but the contribution limits apply across all IRAs. For example, suppose you contribute $4,000 to a Roth IRA in 2025. In that case, you could also contribute $3,000 to your traditional IRA in that same y🐼ear (assuming that their contributions are not limited by their MAGI). If that taxpayer is age 50 or older, they could contribute an additional $1,000.

Age Contribution Limits  

There is no age limit for making contributions to an IRA. There has never been an age limit on Roth IRAs, but traditional IRA contributions used to have an age limit of 70½. That limit was removed with the passage of the Setting Every Community Up for Retirement Enhancemen👍t (SECURE) Act of 2019. 

With a traditional IRA, your ability to participate in a 澳洲幸运5官方开奖结果体彩网:qualified retirement plan (QRP), such as a 401(k), will dictate if and how much you can contribute to the IRA. With a Roth IRA, participation in a QRP has no bearing. 

Roth IRA Contributions and the Saver’s Credit

Roth IRA contributions are not 澳洲幸运5官方开奖结果体彩网:tax-deductible. They are made with after-tax dollars. However, low- and moderate-income taxpayers may qualify for the 澳洲幸运5官方开奖结果体彩网:Saver’s Credit.

This tax break allows for a 澳洲幸运5官方开奖结果体彩网:tax credit of 10% to 50% for the amount contributed to a Roth IRA. Depending on the filing status, 澳洲幸运5官方开奖结果体彩网:adjusted gross income (AGI), and Roth IRA contribution, the credit can be up to $2,000.

For tax year 2025, the top-end income limits to receive the Saver's Credit are $79,000 for those married filing jointly (up from $76,500 in 2024), $59,250 for head-of-household filers (up from $57,375 in 2024), and $39,500 for single taxpayers (up from $38,250 in 2024).

Roth IRA Alternatives

If you are ineligible for a Roth IRA, you may still be able to find 澳洲幸运5官方开奖结果体彩网:tax-exempt options to generate retirement income. If your company o🐟ffers a Roth 401(k) option, this is something to consider.

If not, you can look to permanent life insurance products like whole life that contain a tax-advantaged 澳洲幸运5官方开奖结果体彩网:cash accumulation component. This can be draw🎃n down during retirement, or rolled into an annuity.

澳洲幸运5官方开奖结果体彩网:Municipal bonds are another tax-exempt strategy, but to gain the maximum tax advantage you must be a resident of the place where they are issued. Moreover, municipal bonds often pay 澳洲幸运5官方开奖结果体彩网:tax-equivalent yields similar to or lower than taxable bonds.

The Bottom Line

Understanding the IRS limits for contributing to a tax-advantaged retirement account like and IRA can help you plan for the year ahead to maximize your tax benefits. By contributing up to the maximum, you can help your retirement funds grow more quickly.