Individual retirement accounts, or IRAs, can help you save and invest for retirement. But they come with annual limits on how much you can contribute and deduct from your taxes, both of which may be impacted by how much you earn. Here's what you need to know.
The IRS's annual IRA contribution limit covers contributions to all personal IRAs, including both traditional IRAs and Roth IRAs.
IRA contribution limits for 2024
The IRA contribution limits for 2024 are $7,000 for those under age 50, and $8,000 for those age 50 or older. You can make 2024 IRA contributions until the unextended federal tax deadline (for income earned in 2024).
IRA contribution limits for 2025
The IRA contribution limits for 2025 are $7,000 for those under age 50, and $8,000 for those age 50 or older. The IRA contribution limits for 2025 are the same as for 2024. You can make 2025 IRA contributions until the unextended federal tax deadline (for income earned in 2025).
2024 | 2025 | |
Under age of 50 | $7,000.00 | $8,000.00 |
Age 50 and older | $7,000.00 | $8,000.00 |
Additional IRA limit provisions to keep in mind
The IRA contribution limits above are the combined maximum you can contribute annually across all personal IRAs. This means if you have a traditional IRA and a Roth IRA, you cannot contribute more than this limit across both accounts in a year.
You also cannot contribute more to your IRAs than the income you earn each year. If your income is lower than the contribution limit, your annual IRA contribution may be limited to your earned income. For example, if your earned income is $5,000, your max contribution limit is $5,000.
Note: Your contributions may be limited to what your spouse makes if you have no income and are contributing to a spousal IRA.
What happens if you contribute too much to your IRA?
If you contributed too much to your IRA, you have up until when your taxes are due to remove any excess contributions as well as any investment gains those contributions may have made. Those investment gains will have to be reported on your taxes.
If you don't catch your excess contributions by your tax deadline, you may have to pay a 6% tax penalty on the excess amount each year until you remove those funds from the account.