Roth IRAs are just one type of popular individual retirement account (IRA), the other being traditional IRAs. Unlike a traditional IRA, which is funded with tax-deferred contributions, a Roth IRA is funded with contributions made on an after-tax basis or through a 529 rollover (after 2024). Because of this, Roth IRAs are considered to be 澳洲幸运5官方开奖结果体彩网:tax-advantaged, and there are strict contribution limits based on income level. Every year, these contributions and income levels can be adjusted, so it's important to learn how much you can fund your account.

Roth IRA Contribution Limits for Tax Year 2025

You can fund a Roth IRA up to your contribution limit until 澳洲幸运5官方开奖结果♊体彩网:tax filing day of t🎶he following year. For instance, you can fu♕nd your Roth through April 1⛎5, 2025, and the contributions will count toward your 2024 limit. However, if you file your taxes before the deadline, the contributions you make after that point count toward the next year's limit. Keep in mind if you file an extension on your taxes, you don't get additional time to fund your Roth.

For 2024 and 2025, the IRS announced the full Roth IRA contribution limit is $7,000. People 50 years old and over can contribute 🗹an additional $1,000 if the🀅y meet income qualifications.

Roth IRA Phase-out Ranges

Not everyone can contribute to a Roth IRA since the IRS places income limitations on these accounts. Every year, the IRS publishes the phase-out ranges for contributing. These income limits are based on your 澳洲幸运5官方开奖𝓡结果体彩网:modified adjusted grossไ income (MAGI) and tax-filing status. If you're in t💜he phase-out range, you can make partial contributions but not the maximum limit for the year.

To determine your MAGI, you can look at your 澳洲幸运5官方开奖结果体彩网:adjusted gross income (AGI) and add ♉the deductions that might have been taken out. Look at the income phase-out ranges below to see if you can make full or reduced contributions to yo✤ur Roth IRA.

For example, if you're a single filer and you make less than $150,000 MAGI in 2025, you can contribute the full amount. If you make $155,000, you can contribute a partial amount, and if you earn more than $165,000, you are ineligible for a Roth IRA.

Roth IRA Catch-up Contributions

In a perfect world, you might be able to fund 🃏your Roth IRA to the maximum limit every single year, which could really help your retirement fund grow. Unfortunately, there are probably years that you missed out ♐on funding your Roth to the max or contributing to it at all.

If you're 50 or older, you can contribute more to your Roth IRA in an attempt to catch up a little. Usually, the IRS allows you to contribute an extra $1,000 each tax year in 澳洲幸运5官方开奖结果体彩网:catch-up contributions if you're eligible.

Withdrawing From a Roth IRA

With a Roth IRA, you can withdraw your contributions at any time. You don't have to wait until retirement, and you're not required to take minimum distributions once you reach retirement age. This is because you've already paid tax on the contributions, and it's up to you what to do with the money in the account. That said, you can't withdraw the earnings until you're at least 59 ½ and you've owned the account for at least five years.

For example, someone who is 58 years old couldn't withdraw their earnings but could withdraw earnings and contributions if they became disabled or was a first-time homebuyer. Once they reach 59 ½, they could withdraw funds penalty-free for any reason.

Those under 59 ½ or people who haven't held their Roth IRA for at least five years do have the option of withdrawing earnings, but they'll face a 10% penalty.

The Bottom Line

Contributing to a Roth IRA can be a smart strategy to save for retirement, but you've got to know the limits and withdrawal rules so you're not hit with a surprise penalty. Fortunately, since you've already paid taxes on your contributions, you have more flexibility with the account before you retire. And, unlike traditional IRAs, you're not required to take out mi꧙nimum distribution payments, so y🌼ou could leave the account to your heirs.