IRA Contributions Limits & Deadlines

As you start contributing to your Individual Retirement Account (IRA), be aware of Internal Revenue Service (IRS) restrictions related to amounts, filing status and income thresholds. Eligibility differs based on the type of IRA and is important to keep in mind as you improve your personal finances. Don't sell yourself short on retirement savings and don’t continually leave it for “next year.”

The IRS says you can contribute up to $6,500 to Traditional IRAs and Roth IRAs, provided you're under age 50 and you've earned wages at least equal to that amount. If you're 50 or older, you can put in an additional $1,000 (for a total of $7,500).¹ For Simplified Employee Pension (SEP) IRAs, which are tax-advantaged accounts that may be offered at work, you can put in 25% of your annual wage, up to a $66,000 limit,² regardless of age. If you put money in multiple IRA accounts, the combined total for all retirement accounts must be below the limit.

Contribution Deadline

You have until April 18 of the current calendar year to make contributions to an IRA account for the previous year. For example, for tax year 2022 IRA contributions, you could have put the money in at any time during 2022 and up until April 18, 2023. If you haven’t contributed up to the limit in the past, you may be allowed to make catch-up contributions down the road.

Traditional IRAs and SEP IRAs

To contribute to a Traditional IRA or SEP IRA, you must have earned income from wages, salary, tips, bonuses, commissions and self-employment; it excludes investments and pensions. If you're a non-earning spouse who files a joint tax return with a working spouse, you also are eligible to contribute.

Depending on your income, you could be eligible to take a tax deduction on the amount you contribute to your Traditional IRA or SEP IRA. For 2023, there are no income limits for deductible contributions by single filers or married people who don’t have a retirement plan at work, and the traditional IRA deduction can be up to 100% of their contribution (up to the $6,500 or $7,500 limit).

Some annual contribution limits do kick in for married people where one spouse has a retirement plan at work, and one doesn’t. In 2023, married couples filing jointly who earn $116,000 or less can take a full deduction up to the limit. There’s a partial deduction allowed for those making more than $116,000 but less than $136,000, and no deduction for those making $136,000 or more. If you’re married filing separately, there’s only a partial deduction allowed, and you must earn less than $10,000.

Roth IRA Income Limits

You won’t get a deduction for contributions to a Roth IRA like you would for traditional IRA contributions because the earnings grow tax-free, so the benefit comes later. But Roth IRA contribution limits depend on your Modified Adjusted Gross Income or MAGI. For 2023, married couples filing jointly can contribute up to the limit if they earn less than $218,000. There’s a reduced contribution limit allowed for those making between $218,000 and less than $228,000, and no contributions allowed for those earning more than $228,000. If you’re married filing separately, a reduced contribution limit is allowed if you earn less than $10,000, and no contributions are allowed for those earning more than $10,000.

As you might expect, there are lots of twists and turns in the tax code. It can be worthwhile to explore IRAs if you’d like to save more money for retirement. If you want help exploring your retirement options, reach out to a Navy Federal Investment Services advisor.