Everything you need to know about Traditional IRA in 2025 — tax benefits, income limits, Spousal IRA, Backdoor Roth strategy, and updated RMD rules. Start planning your retirement the smart way. Click below to get started.
What is a Traditional IRA?
A Traditional IRA is a personal retirement account that offers tax advantages. Contributions may be tax-deductible, and earnings grow tax-deferred until retirement.
2025 Deduction Limits
| Filing Status | Full Deduction Income Limit | No Deduction Income Limit |
|---|---|---|
| Single (with workplace plan) | ≤ $77,000 | ≥ $87,000 |
| Married Filing Jointly (spouse has plan) | ≤ $123,000 | ≥ $143,000 |
Spousal IRA
Non-working spouses can contribute to an IRA using the working spouse’s income. Each can contribute $7,000 ($8,000 if age 50+).
Common Misconceptions
- Everyone gets a deduction — Deduction limits apply based on income.
- Deferring taxes is always better — Not if your retirement tax rate is higher.
- Early withdrawals not allowed — Exceptions exist for certain expenses.
Traditional IRA vs Roth IRA (2025)
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Contribution Tax Benefit | Deductible (if eligible) | Not deductible |
| Tax on Withdrawals | Taxable | Tax-free |
| Income Limits | No limit (deduction limit applies) | Contribution limit applies |
| RMD | Yes (age 73) | No |
Backdoor Roth IRA
If you're a high-income earner, contribute to a non-deductible Traditional IRA and convert to a Roth IRA. Watch out for the Pro-rata Rule if you have other pre-tax IRA balances.
2025 IRA Updates
| Item | 2025 Value |
|---|---|
| IRA Contribution Limit | $7,000 (or $8,000 if 50+) |
| RMD Start Age | 73 (75 starting in 2033) |
| Roth IRA Income Limit (Single) | Full: ≤ $146,000 / Ineligible: ≥ $161,000 |
IRA Setup Checklist
| Checklist Item | What to Consider |
|---|---|
| Fees | Account and trading fees |
| Auto-Contributions | Does it offer scheduled deposits? |
| Customer Support | Rollover/tax assistance available? |
| Investment Options | Are ETFs and mutual funds available? |
Final Thoughts
Traditional IRA is a core tool for retirement savings. With the latest 2025 rules, plan strategically and secure your financial future today.
What is RMD (Required Minimum Distribution)?
RMD is a mandatory annual withdrawal from tax-deferred retirement accounts like Traditional IRA and 401(k), starting at age 73 (as of 2025). The amount is calculated based on your account balance divided by your IRS life expectancy.
For example, if you are 72 and your IRS-assigned life expectancy is 25.6 years, the calculation is:
OR
Total Balance × 3.91% = Required Withdrawal
If your account balance is $500,000, then:
RMD Percentage by Age (IRS 2025 Table)
| Age | Life Expectancy (Years) | RMD % (1 ÷ Life Expectancy) |
|---|---|---|
| 72 | 25.6 | 3.91% |
| 73 | 24.7 | 4.05% |
| 74 | 23.8 | 4.20% |
| 75 | 22.9 | 4.37% |
| 76 | 22.0 | 4.55% |
| 77 | 21.2 | 4.72% |
| 78 | 20.3 | 4.93% |
| 79 | 19.5 | 5.13% |
| 80 | 18.7 | 5.35% |
| 81 | 17.9 | 5.59% |
| 82 | 17.1 | 5.85% |
| 83 | 16.3 | 6.13% |
| 84 | 15.5 | 6.45% |
| 85 | 14.8 | 6.76% |
Example: RMD Calculation at Age 75
If your account balance is $400,000 and you're age 75, your RMD would be:
RMD Auto Calculator
Enter your age and account balance to calculate your required minimum distribution (RMD).
