$7,000

If you are over 50 an additional $1,000

Traditional IRA: Contribute pre-tax dollars and get a tax deduction now, but pay income tax on withdrawals in retirement.

Roth IRA: Contribute after-tax dollars, with no upfront deduction, but provides tax-free withdrawals and no required minimum distributions (RMDs) in retirement.

Income limits for Roth IRAs:

Single filers: Eligibility for contributions begins to phase out for those with a Modified Adjusted Gross Income (MAGI) between $150,000 and $165,000. Above $165,000, no contributions are allowed.

Married filing jointly: The phase-out range for MAGI is between $236,000 and $246,000. No contributions are allowed for those earning above $246,000

$23,500

If you are 50-59 or 65+ an additional +$7,500

If you are 60, 61, 62 and 63, an additional +$11,250 instead of $7,500 under a change made in SECURE 2.0 Act of 2022.

The total combined limit for employee and employer contributions to a 401(k) is $70,000 for those under 50, and $77,500 for those 50 and over. For employees aged 60-63, the combined total can reach $81,250. 

Unlike a pension, a 401(k) shifts the investment risk from the employer to the employee, which significantly reduces the company's financial burden. The plan's administrative flexibility and high savings potential also make it a powerful tool for attracting and retaining top talent. 

For self-employed individuals and small business owners, WITH EMPLOYEES the following limits apply to employer-funded SEP IRAs: 

Maximum employer contribution: The lesser of 25% of an employee's compensation or $70,000.

Compensation limit: The amount of compensation that can be considered for contributions is capped at $350,000.

No catch-up contributions: Unlike other plans, SEP IRAs do not offer a catch-up contribution for older workers.

Under age 50: $16,500

Age 50 and over (standard catch-up): $20,000 ($16,500 + $3,500)

Ages 60, 61, 62, and 63 (enhanced catch-up): $21,750 ($16,500 + $3,500 + $1,750)

Savings Incentive Match Plan for Employees

Employer Contributions:

The limits above are for employee salary deferrals; employers must also contribute by either matching employee contributions (up to 3%) or making a fixed 2% non-elective contribution. 

Eligibility:

You are generally eligible to contribute if you earned at least $5,000 in the preceding two years and expect to earn at least $5,000 in the current year from the employer sponsoring the plan. 

Funding:

Contributions are made through payroll deductions. 

A solo 401(k) or Individual 401(k) is a retirement plan designed for business owners with no full-time employees, except for a spouse who also earns income from the business. It is also known as a one-participant 401(k), individual 401(k), or self-employed 401(k). 

Solo 401(k)s may make two types of contributions, allowing for a much higher total contribution limit than a SEP IRA. 

Employee salary deferral: You can contribute up to $23,500 as the employee.

Catch-up contributions: If you are age 50 or over, you can make an additional catch-up contribution. For 2025, this is $7,500 for those aged 50-59 or 64+, and $11,250 for those aged 60–63.

Employer profit sharing:As the employer, you can contribute up to 25% of your net self-employment income.

Total contributions: The maximum combined employer and employee contribution for 2025 is $70,000, or up to $81,250 if you are age 60–63 and include the enhanced catch-up contribution. 

$23,500 as the employee or spouse, plus an additional $7,500 "catch-up" contribution if 50 or older.

A Roth solo 401(k) allows self-employed individuals and their spouses to make after-tax contributions and grow their retirement savings tax-free.

Unlike a Roth IRA, a Roth solo 401(k) has no income limits and significantly higher contribution caps.

A Roth solo 401(k) is a feature within a standard solo 401(k) that allows an owner’s employee contributions to be made with after-tax dollars, enabling tax-free withdrawals in retirement. 

Contributions grow tax-free and can be withdrawn tax-free after age 59 ½ if the account is held for at least five years.

Employer contributions must go into the traditional (pre-tax) portion of the solo 401(k), not the Roth portion.