Saving enough for retirement takes time, dedication and coordination. When you put money into an employer-sponsored plan or an individual retirement account (IRA), you get certain tax benefits as an incentive for saving for your future.
This article covers:
The 2025 retirement plan contribution limits Considerations for traditional and Roth IRA contributions 5 tips for making the most of your retirement contributions
Retirement plan contribution limits for 2025
Each account type has caps on how much you can put into them each year that can vary depending on the type of plan and type of contribution.
In addition, if you are 50 or older, many plans offer the opportunity to boost your savings with
Retirement plan | Employee/personal contribution limit | Catch-up limit if age 50 or older | Combined employee & employer contribution limit |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $23,500 | $7,500 | Lesser of $70,000 or 100% of your compensation | |
| $7,000 | $1,000 | Not applicable | |
| $7,000 | $1,000 | Not applicable | |
| $16,500 | $3,500 | Not applicable, but employers must make either matched contributions up to 3% of your compensation or fixed contributions of 2% of your compensation* | |
| Employers make contributions only | None | The lesser of $70,000 or 25% of your salary |
Considerations for traditional & Roth IRAs
Traditional IRAs and Roth IRAs are both popular ways of building your assets for retirement, but they have different rules when it comes to contributions.
Traditional IRA contributions may be tax-deductible
You may be able to deduct the contributions that you make to a traditional IRA, which can reduce your taxable income.
- If you make less than the minimum modified adjusted gross income (MAGI) listed, you can make a full tax deduction of contributions.
- If you make between the MAGIs listed, you can make a partial deduction of contributions.
- If you make equal to or more than the maximum MAGI listed, you can't deduct contributions.
| Filing status | 2025 MAGI limits for traditional IRA tax deduction | | |
Married filing jointly or qualifying widow(er) | If the contributor is not an active participant (but the spouse does participate) in an employee-sponsored retirement plan: $236,000-$246,000 | | |
Single or head of household |
$79,000-$89,000 | ||
Married filing separately | Less than $10,000: Partial deduction available | ||
Roth IRAs have income limits to participate
Unlike traditional IRAs, Roth IRAs have income limits to participate.
- If you make less than the minimum MAGI listed, you can contribute to a Roth IRA.
- If you make between the MAGIs listed, you can contribute to a Roth IRA but it will be a reduced amount.
- If you make equal to or more than the maximum limit listed, you can't contribute anything to a Roth IRA. If this applies to you,
see these alternatives .
| Filing status | 2025 maximum modified adjusted gross income (MAGI) to contribute to a Roth IRA |
Single or head of household | $150,000-$165,000 |
Married filing jointly | $236,000-$246,000 |
Married filing separately | $0-$10,000 |
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Tips for maximizing your retirement contributions
Consider these tips to make the most out of the investment that you're making into your retirement savings plan:
1. Make a plan to save regularly
To make sure you don't put your retirement savings on the back burner, consider either having the money deducted from your paycheck or setting up a monthly automatic account transfer.
2. Get the matching contribution
If you have an employer-sponsored account that offers
3. Leverage the maximums for all accounts
It's important to realize that contributing to one type of retirement account doesn't prevent you from contributing to another. For instance, if you have a 401(k) and are putting in enough to reach the employer match, consider next focusing on
4. Don't let limits restrict your savings
If you've hit the 401(k) contribution limits for 2025 or the max for other types of accounts, it doesn't mean you have to stop saving. Consider other investment options that could help your money grow, such as
5. Beware of penalties for overfunding
Keep in mind as you aim to max out your tax-advantaged retirement savings options that it is possible to go over the limit, and you may end up having to pay taxes and penalties on the overage.
- If you contribute too much to an employer-sponsored account, such as a 401(k), you could end up being taxed and penalized on the amount you overcontributed unless you take out the excess by the tax filing deadline. And if you haven't yet reached age 59½, you'll likely also have to pay a 10% early withdrawal penalty on the earnings.
- If you overcontribute to an IRA, you'll owe a 6% excise tax if you don't remove the excess before your tax filing deadline. Any earnings will be taxed when you remove the excess contribution.
Need help with your retirement plan?
Making sure you save enough is a critical component of retirement planning. In addition to benefiting you personally, it can protect those you care about by preventing you from requiring financial support from them later in life.
It's a good idea to review your plan at the end of each year to make sure you're taking full advantage of the tax benefits retirement plans offer without crossing any limits. For experienced guidance on retirement planning, consider connecting with a
