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One of the simplest savings methods is funneling a greater percentage of funds into tax-advantaged accounts. This includes IRAs, Health Savings Accounts (HSAs), and Education Savings Accounts (ESAs). Whichever self-directed account you choose, make the most of your tax advantages by keeping up with:
Beyond the usual contribution limits, additional catch-up contributions are available for those aged 50 or older. Congress incentivizes older retirement plan participants to place a greater percentage of their assets in tax-advantaged accounts.
Despite the increased access, many SDIRA holders who are eligible fail to take advantage of their full contribution limits. The SECURE Act 2.0 further emphasized the opportunities for catch-up contributions, setting out expanded limits for those aged 60-63.
There’s never been a better time to capitalize on tax-advantaged growth, for SDIRA holders of all ages.
In this post, we’ll cover the 2025 contribution limits for every self-directed retirement account, highlighting the recent changes in catch-up contribution opportunities.
The SECURE Act 2.0 enacted dozens of changes to individual and workplace retirement plans in the hopes of increasing participation. One of the most significant changes for SDIRA holders is the establishment of future increases in catch-up contribution limits.
The SECURE Act 2.0 indexed annual IRA catch-up contribution limits for future cost-of-living adjustments, beginning in the 2024 tax year.
The SECURE Act 2.0 also introduced an additional catch-up contribution opportunties for those aged 60-63 and participating in a SIMPLE IRA or 401(k), 403(b), 457(b), or Thrift Savings Plan. Let's cover these changes in more detail.
Thanks to the SECURE Act 2.0, catch-up contribution limits are expanding for certain qualified plan participants—especially for those aged 60 to 63.
For example, Jane, age 60, earns $100,000 in 2025. She contributes the max: $23,500 + $11,250 (Enhanced Catch-Up) = $34,750. Her employer is very generous and contributes 25% of her salary, $25,000. So, her total 401(k) contribution for the year is $59,750. Jane is well within her limit of $81,250 for her age group.
Thanks to the SECURE Act 2.0, catch-up contributions are also increasing for certain participants in SIMPLE IRAs.
In addition, employees earning at least $5,000 at companies with 25 or fewer employees can contribute 10% more above the standard limit. Their new limit is $18,150 (vs. $16,500), plus catch-up contributions if eligible.
Meanwhile, employees at larger employers may qualify for higher limits too—but only if the employer increases their contribution to a 4% matching contribution or 3% non-elective for all eligible employees.
For traditional IRAs, almost everyone can contribute, but the income limit determines if your contribution is tax-deductible.
For Roth IRAs, only people with a modified adjusted gross income (MAGI) under the income limit are eligible to contribute.
Be aware that the limits for Roth and traditional IRAs are a combined limit for both accounts. For instance, if you’re 50 years or older and you’ve already contributed $5,000 to a traditional IRA, you may only contribute an additional $3,000 to a Roth IRA. This meets the combined maximum catch-up contribution limit of $8,000.
Self-Directed IRAs:The Basics Guide. Download Now >
Traditional and Roth IRAs aren't the only tax-advantaged accounts subject to contribution limits. Here are the catch-up contribution limits for every other type of self-directed account.
Per year, per child: $2,000
Beginning in 2026, if you earn $145,000 or more (adjusted for inflation) in the prior year, all catch-up contributions to 401(k), 403(b), or 457(b) plans must be made to a Roth account, meaning with after-tax dollars. This change doesn’t apply to IRAs, only employer-sponsored retirement plans.
In recent years, supply chain shocks and inflation have led the Consumer Price Index to become more volatile. Cost-of-living uncertainty means that changes in contribution limits are likely to become more frequent for SDIRA holders.
After all, an additional $500 in an IRA can lead to returns many times over in the decades to come. As you fine-tune your investment strategy, visit Entrust’s IRA Contribution Limits page to make the most of your tax-advantaged accounts.
Once you’ve settled on your investment plan, spring into the year with confidence by taking control of your portfolio. Consider funding a self-directed, tax-advantaged account at Entrust.
With over 40 years of experience in retirement account services, our knowledgeable staff is ready to help you work toward your 2025 investing goals. Schedule a call with one of our experienced IRA experts to set your savings up for success.
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