IRA contribution limits for 2025: What you need to know

What Is A Traditional Ira

Planning for retirement starts with understanding how much you can contribute to your IRA each year. Since the IRS updates these limits annually to keep up with inflation, staying informed is key to making the most of your savings.

In 2025, IRA contribution limits have changed again, giving you another chance to maximize your tax-advantaged savings. Whether you’re contributing to a Traditional IRA or a Roth IRA, knowing these limits can help you stay on track with your retirement goals.

Let’s break down the 2025 IRA contribution limits, what they mean for you, and how you can make the most of them while staying compliant.

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Traditional & Roth IRA contribution limits for 2025

The IRS has set the following limits for IRA contributions in 2025:

  • Under age 50: $7,000 per year
  • Age 50 & older (Catch-up contribution): $8,000 per year (includes a $1,000 catch-up bonus for those 50+)

These limits apply across all your IRAs meaning if you have both a Traditional and Roth IRA, the total contribution across both accounts cannot exceed $7,000 (or $8,000 if you’re 50+).

How these limits affect different types of IRAs

Traditional IRA contribution rules

  • No income limits: Anyone earning an income can contribute.
  • Potential tax deductions: Your contributions might be tax-deductible, but it depends on your income and whether you have a workplace retirement plan.
  • Tax-deferred growth: You won’t pay taxes on your savings until you withdraw them in retirement.

Roth IRA contribution rules (Income restrictions apply)

  • After-tax contributions: You contribute money that’s already been taxed, so you won’t get a tax deduction now.
  • Income limits apply: If you earn above a certain amount, your contribution limit may be reduced or eliminated.
  • Tax-free withdrawals: In retirement, your withdrawals are completely tax-free, as long as you follow IRS rules.

Choosing between a Traditional or Roth IRA depends on your income, tax situation, and long-term financial goals. Knowing these rules can help you make the best decision for your future.

What happens if you contribute more than the IRA limit?

Exceeding the IRA contribution limits can result in IRS penalties, so it’s crucial to stay within the allowed limits.

IRS penalty for excess contributions

  • The IRS imposes a 6% penalty on any amount contributed over the limit.
  • This penalty applies each year the excess remains in your account.

How to fix an excess contribution

  • Withdraw the excess: You can remove the extra amount before the tax filing deadline (April 15, 2026, for 2025 contributions) to avoid the penalty.
  • Apply it to next year: In some cases, the IRS allows you to apply the excess to the following year’s contribution—just make sure it doesn’t put you over next year’s limit.

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Spousal IRAs: How non-working spouses can contribute

Many people don’t realize that non-working spouses can still contribute to an IRA—thanks to the spousal IRA rule.

  • If one spouse earns income and the other does not, the non-working spouse can contribute to an IRA under their name.
  • The working spouse’s income must be at least equal to the combined contributions.
  • The standard IRA limits ($7,000 or $8,000 if 50+) still apply per spouse.

This allows married couples to double their retirement savings—potentially contributing $14,000-$16,000 per year combined.

Can you contribute to both a Traditional and Roth IRA?

Yes! You are allowed to contribute to both a Traditional IRA and a Roth IRA in the same year. However, there is a catch—the total amount you contribute across both accounts can’t exceed the annual limit. For 2025, that is $7,000 (or $8,000 if you’re 50 or older).

Here is how it works:

  • If you contribute $4,000 to a Traditional IRA, you can only contribute $3,000 to a Roth IRA (assuming you’re under 50).
  • If your income is too high for Roth IRA contributions, you can put the full amount into a Traditional IRA instead.

This strategy allows investors to balance their tax benefits—using the Traditional IRA for upfront tax deductions and the Roth IRA for tax-free withdrawals in retirement.

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How to contribute to an IRA on Public.com

Saving for retirement shouldn’t be complicated. That is why Public.com makes it easy to open and manage your IRA with a simple, transparent process designed for long-term investors.

Here’s how you can get started:

1. Sign up for an IRA on Public

Getting started is quick and easy. You can sign up for a Traditional or Roth IRA directly on Public.com or by downloading our Public app on iOS or Android.

2. Add funds to your IRA account

You can fund your IRA via a bank transfer, debit card, or by rolling over an existing IRA from another provider.

3. Set up your contributions

Choose between making a one-time lump-sum deposit or setting up automatic contributions to stay on track with your retirement goals.

4. Manage your IRA investments in one place

Invest in stocks, ETFs, bonds, and more—all within your IRA. Plus, track your retirement savings with Public.com’s tools and insights to keep your portfolio on the right path.

Tip: Consider contributing early in the year to take advantage of compounding growth over time.

Final thoughts: Maximize your IRA contributions in 2025

The IRA contribution limits for 2025 offer more room to save for retirement, especially with the increased limits. Here are few ways to make the most of your IRA:

  • Contribute as much as possible – Investing more means maximizing your benefit from tax-advantaged growth for the future.
  • Stay within the limits – Over contributing can lead to penalties, so be mindful of the annual cap.
  • Explore a spousal IRA – If you’re eligible, this can help you and your spouse save even more for retirement.
  • Start early – The sooner you invest, the longer your money has to grow with compound interest.

Ready to open or contribute to your IRA? Start building your retirement savings by Opening an IRA on Public.com today

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Frequently Asked Questions

1. What is the maximum amount I can contribute to an IRA in 2025?

In 2025, you can contribute up to $7,000 if you’re under 50. If you’re 50 or older, you get a $1,000 catch-up bonus, bringing your total limit to $8,000.

2. Can I contribute to both a Traditional and Roth IRA?

Yes, you can contribute to both, but the combined total contribution can’t go over $7,000 (or $8,000 if you’re 50+). Just keep in mind that Roth IRA contributions depend on your income eligibility.

3. What happens if I go over the IRA contribution limit?

If you contribute over the IRA contribution limit, the IRS charges a 6% penalty on the excess amount each year until you fix it. You can withdraw the extra funds before the tax deadline or roll it into next year’s contributions.

4. When is the last day to contribute to my IRA for 2025?

April 15, 2026 is the last day to contribute for 2025 IRAs, which lines up with the standard IRS tax filing deadline.

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