It’s important to save for retirement during your working years so you’re not just reliant on Social Security once your career comes to an end. And you have several options for building up your nest egg.

One is to fund a traditional IRA, which gives you an immediate tax break on your contributions. You could also fund a Roth IRA, which doesn’t come with an up-front tax break but offers perks galore.

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With a Roth IRA, your investments gains are tax-free, and withdrawals are tax-free in retirement. The latter is a huge benefit, since it gives you one less financial issue to worry about at a time in life when money might feel tight.

A Roth IRA also gives you the benefit of not having to take required minimum distributions (RMDs). Avoiding RMDs makes it possible to leave your money alone for a longer period of time to maximize the tax-free gains we just talked about.

In 2025, Roth IRA contribution limits are staying the same as in 2024. You can contribute up to $7,000 if you’re under age 50, or up to $8,000 if you’re 50 or older.

But there are income limits you’ll need to keep in mind if you’re thinking of funding a Roth IRA in 2025. Here’s what you need to know.

Roth IRA income limits are rising

Your ability to fund a Roth IRA hinges on your modified adjusted gross income, or MAGI. If you’re single or a head of household, you can make a full Roth IRA contribution next year if your MAGI is below $150,000. Between $150,000 and $165,000, you can make a partial Roth IRA contribution. But beyond $165,000, Roth IRA contributions are off the table for 2025.

If you’re a married couple filing a tax return jointly, you can make a full Roth IRA contribution with a MAGI below $236,000. Between $236,000 and $246,000, you can make a partial Roth IRA contribution, and contributions phase out completely once your MAGI exceeds $246,000.

If you’re married filing a separate tax return, the phase-out range for Roth IRA contributions remains between $0 and $10,000 as it is in 2024. With this tax-filing status, you don’t get much leeway to fund a Roth IRA.

What to do if you’re not eligible for a Roth IRA in 2025

If your income is too high to contribute to a Roth IRA directly in 2025, don’t assume the option goes away completely. In that case, you can make contributions to a traditional IRA and then convert it to a Roth IRA after the fact.

But Roth IRA conversions can be a tricky thing, and it’s important to time them correctly to minimize the tax hit. If you convert a $7,000 IRA to a Roth in 2025, that $7,000 counts as income for tax purposes. And in some situations, it could have implications beyond the taxes you pay for the year.

For example, if you’re older and are on the cusp of being eligible for Medicare, a Roth IRA conversion could give your income enough of a boost so that you’re subject to a surcharge down the line known as an income-related monthly adjustment amount. That could, in turn, make both Parts B and D more expensive for you.

For this reason, if you’re looking to do a Roth IRA conversion — in 2025 or at any time — it pays to consult a financial or tax professional. They can help walk you through your options so you make that conversion at the most optimal time.

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