2024–2025 Self-Directed IRA Contribution Limits
Knowing the self-directed IRA contribution limits is essential for anyone serious about maximizing their retirement savings. These limits determine how much you can invest tax-free or tax-deferred, ensuring you take full advantage of your IRA’s benefits.
While the 2025 contribution limits for Traditional and Roth IRAs remain unchanged from 2024, the IRS has updated the income phase-out ranges for Roth IRA contributions. Additionally, you can make contributions to Traditional and Roth IRAs for the 2024 tax year until Tax Day in 2025, (April 15), unless you qualify for an IRS extension. Similarly, 2025 contributions can be made until Tax Day in 2026, unless you qualify for an IRS extension.
For those using SDIRAs for alternative investments like real estate or private lending, staying informed is even more critical, as IRS rules can affect your portfolio strategy. The IRS adjusts these limits every few years, so keeping up to date helps you stay compliant and make the most of your retirement plan.
2024–2025 Traditional IRA Contribution Limits
Traditional IRAs are tax-deferred, meaning that you don’t pay taxes on the interest and earnings in your IRA until you withdraw funds. IRA owners may start taking distributions from their IRAs penalty-free, starting at age 591/2 but are not required to start taking distributions from traditional IRAs until age 73, per IRS Rules.
| Traditional IRA | Under 50 | $7,000/year |
| 50+ | $8,000/year |
Traditional IRA Contribution Qualifications
- You must have earned taxable income during the tax year.
- If you or your spouse have a workplace retirement plan, such as a 401(k) — or if your income exceeds certain limits (see the table below on MAGI) — your ability to deduct Traditional IRA contributions may be reduced or eliminated.
- If neither you nor your spouse have an employer-sponsored retirement plan, you can claim the full IRA deduction regardless of your income.
What Is Modified Adjusted Gross Income (MAGI)?
MAGI is your total income before certain deductions, like student loan interest or tuition fees. The IRS uses MAGI to determine whether you qualify for certain tax benefits, such as deducting contributions to a Traditional IRA, based on your income and tax filing status.
Income Limits for Traditional IRA Deductions
The ability to deduct contributions to your Traditional IRA depends on your income and tax filing status, particularly if you or your spouse have access to a workplace retirement plan, such as a 401(k). Here, we outline the income thresholds for full, partial, or no deduction eligibility for the 2024 and 2025 tax years.
2024 Income Limits for Traditional IRA Deductions
| Tax Filing Status | Full Deduction | Partial Deduction | No Deduction |
|---|---|---|---|
| Single (With A Workplace Retirement Plan) | $77,000 or less | $77,000 – $87,000 | Greater than $87,000 |
| Married, Filing Jointly (With a Workplace Retirement Plan) | $123,000 or less | $123,000 – $143,000 | Greater than $143,000 |
| Married, Filing Separately (With a Workplace Retirement Plan) | N/A | $0 – $10,000 | Greater than $10,000 |
| Spouse of an Employee with a Workplace Retirement Plan | $230,000 or less | $230,000 – $240,000 | Greater than $240,000 |
2025 Income Limits for Traditional IRA Deductions
| Tax Filing Status | Full Deduction | Partial Deduction | No Deduction |
|---|---|---|---|
| Single (With A Workplace Retirement Plan) | $79,000 or less | $79,000 – $89,000 | Greater than $89,000 |
| Married, Filing Jointly (With a Workplace Retirement Plan) | $126,000 or less | $126,000 – $146,000 | Greater than $146,000 |
| Married, Filing Separately (With a Workplace Retirement Plan) | N/A | $0 – $10,000 | Greater than $10,000 |
| Spouse of an Employee with a Workplace Retirement Plan | $236,000 or less | $236,000 – $246,000 | Greater than $246,000 |
2024–2025 Roth IRA Contribution Limits
A Roth IRA is a tax-advantaged retirement account where your contributions grow tax-free, and qualified withdrawals in retirement are also tax-free when deductions are taken on or after turning age 591/2, provided your Roth IRA account has been open at least five years, making it an attractive option for savers who want to minimize taxes on their future income.
| Roth IRA | Under 50 | $7,000/year |
| 50+ | $8,000/year |
Roth IRA Contribution Eligibility
- You must have earned taxable income during the tax year.
- You must have opened your account before the tax deadline for the year that the contribution applies.
- Your ability to contribute to a Roth IRA is determined by certain income limits, known as MAGI Phase-Out Ranges.
Roth IRA Phase-Out Ranges by Income
Because of the tax advantages offered by Roth IRAs, the IRS provides specific guidance on income-based contribution limits, which differ between 2024 and 2025.
2024 Phase-Out Ranges
- If you are single or the head of the household, you can contribute the full amount if your annual income is below $146,000. Contributions phase out between $146,000 – $161,000.
- If you are married, filing jointly, you can contribute the full amount if your joint annual income is below $230,000. Contributions phase out between $230,000 – $240,000.
- If you are married, filing separately, contributions phase out completely if your annual income exceeds $10,000.
2025 Phase-Out Ranges
- If you are single or the head of the household, you can contribute the full amount if your annual income is below $150,000. Contributions phase out between $150,000 – $165,000.
- If you are married, filing jointly, you can contribute the full amount if your joint annual income is below $236,000. Contributions phase out between $236,000 – $246,000.
- If you are married, filing separately, contributions phase out completely if your annual income exceeds $10,000.
These ranges determine how much you can contribute to a Roth IRA based on your MAGI, making it important to keep up to date on the current Roth IRA contribution limits.
What If My Income Level Restricts Roth IRA Contributions
You may have other options, such as converting funds from a Traditional IRA to a Roth IRA. Keep in mind, however, that a Roth conversion is a taxable event with a deadline of December for the tax year. Before taking action, it’s important to consult with a tax advisor or financial professional to understand the potential implications and determine whether this approach aligns with your financial goals.
2024–2025 SIMPLE IRA Contribution Limits
A SIMPLE IRA is a retirement plan designed for small businesses, offering a simple way for employers to help their employees save for retirement while also providing tax benefits.
| SIMPLE IRA | 2024 | 2025 | |
| Maximum employee contribution | $16,000/year | $16,500/year | |
| Maximum contribution for employees 50+ | $19,500/year | $20,000/year | |
| NEW FOR 2025 Maximum contribution for employees 60–63 | - | $21,750/year |
IMPLE IRA Eligibility
- You must be an employer with fewer than 100 employees.
- Employees must have earned at least $5,000 in compensation in any two previous calendar years and be expected to earn at least $5,000 in the current calendar year.
- The employer cannot contribute to any other kind of retirement plan, such as a 401(k), throughout the year.
- As an employer offering a SIMPLE IRA, you must choose one of two contribution methods:
- Match employee contributions dollar for dollar, up to 3% of their annual compensation (if the employee contributes).
- Make a non-elective contribution of 2% of each eligible employee’s compensation, regardless of whether they contribute.
2024–2025 SEP IRA Contribution Limits
A SEP IRA is a tax-advantaged retirement plan that allows small employers to make flexible, tax-deductible contributions to their employees’ retirement accounts. Unlike a SIMPLE IRA, it is fully funded by employer contributions.
| SEP IRA | 2024 | 2025 | |
| Employer contribution limit | Up to 25% annual compensation, with a maximum of $69,000 | Up to 25% annual compensation, with a maximum of $70,000 |
SEP IRA Eligibility
- You can offer your employees a SEP IRA if you are a business, sole proprietor, partnership, or corporation.
- For your employees to be eligible, they need to be at least 21 years old, have worked for you for at least three years, and have earned at least $750.
- As an employer, you’ll contribute to a Traditional IRA that each eligible employee (including yourself) must set up to participate in the SEP plan.
- Employees who earn $345,000 or more in 2024 and $350,000 or more in 2025 cannot take part in a SEP IRA.
Making the Most of Your Self-Directed IRA
Maximizing contributions to your self-directed IRA requires a clear understanding of the annual contribution limits and other eligibility requirements. Whether you’re using a Traditional IRA, Roth IRA, SIMPLE IRA, or SEP IRA, staying informed about IRS rules ensures you make the most of these tax-advantaged retirement accounts.
A reputable and experienced IRA custodian like Forge Trust facilitates the administration of your self-directed IRA, providing the tools and support you need to explore alternative investment opportunities while remaining compliant with IRS regulations.
Open a Forge Trust account to start investing with a self-directed IRA.
Zander is a seasoned product leader with a 12-year history in financial technology, specializing in private market investments. His tenure includes roles at LTSE, Alto, and IHS Markit, where he focused on product management and strategy. Zander holds an MBA from Vanderbilt University, focusing on International Business, and a B.A. in Economics from Colby College.