Changes Coming to IRAs in 2025

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As 2025 approaches, changes to retirement account rules and contribution limits present new opportunities for individuals to enhance their savings strategies. 

Here’s a breakdown of the key changes and how they might impact your financial planning:

For 2025, the maximum contribution limit for traditional and Roth IRAs remains at $7,000. Taxpayers aged 50 and older can still make an additional $1,000 catch-up contribution, bringing their total to $8,000. However, income thresholds for Roth IRA contributions have increased:
  • Single filers can contribute fully if their modified adjusted gross income is below $150,000, with a phase-out between $150,000 and $165,000.
  • For married couples filing jointly, the phase-out range is $236,000 to $246,000

The contribution limit for 401(k), 403(b), and similar plans increases to $23,500, up $500 from 2024. Participants aged 50 and older can add a $7,500 catch-up contribution, making the total $31,000. For those aged 60-63, a new “super catch-up” provision under the SECURE 2.0 Act allows for contributions up to $11,250 during this period, significantly enhancing savings potential.

The income thresholds for the Saver’s Credit, which provides tax benefits to low- and moderate-income savers, will also see an increase. This adjustment ensures more individuals can benefit from contributing to retirement accounts.

If you’re contributing to a traditional IRA and are covered by a workplace retirement plan, the income phase-out range has increased to $79,000–$89,000 for single filers and $126,000–$146,000 for married couples filing jointly.

Planning Ahead

These changes aim to make retirement savings more accessible and advantageous, particularly for older individuals and those nearing retirement. To make the most of these updates, consider consulting us to help tailor your retirement strategy to align with the new regulations.
 
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Taylor Clinkenbeard, CPA

Taylor is a Manager in our tax and client accounting services teams.  She has developed specific expertise in software, accounting processes, and tax laws to serve our clients.

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