As of 2025, several important updates have been introduced to Self-Directed Individual Retirement Accounts (IRAs), impacting contribution limits, catch-up contributions, and Required Minimum Distributions (RMDs). These changes are designed to enhance retirement savings opportunities while providing greater flexibility for account holders. Here is an overview of the key updates.

Contribution Limits

The annual contribution limit for Self-Directed IRAs remains unchanged at $7,000 for 2025. Individuals aged 50 and over can make an additional catch-up contribution of $1,000, bringing their total contribution limit to $8,000. This consistent limit allows individuals to continue building their retirement savings effectively. (source)

Catch-Up Contributions for Ages 60 to 63

A significant update introduced by the SECURE 2.0 Act impacts individuals aged 60 to 63. Starting in 2025, these individuals can make catch-up contributions of up to $11,250 to their workplace retirement plans, such as 401(k)s. This provision enables pre-retirees to maximize their retirement savings during these critical years. (Barron’s)

Required Minimum Distributions (RMDs)

The SECURE Act initially increased the RMD age from 70½ to 72, and the SECURE 2.0 Act has further raised it to 73, effective January 1, 2023. This extension provides account holders with more time to grow their retirement savings before mandatory withdrawals begin. 

Final RMD Regulations

The IRS has clarified the 10-year rule for RMDs. For most beneficiaries, if the original IRA owner had begun taking RMDs before passing away, the beneficiary must take annual RMDs over a 10-year period, ensuring the account is fully depleted by the end of the tenth year. Conversely, if the original owner passed away before the RMD age, the beneficiary can withdraw the entire balance at any time within the 10-year period without annual distribution requirements.

Phase-Out Ranges for IRA Contributions

The income phase-out ranges for traditional IRA contribution deductions have been adjusted for 2025. For individuals covered by a workplace retirement plan, the phase-out range is $79,000 to $89,000 for single filers and $126,000 to $146,000 for married couples filing jointly. For Roth IRAs, the phase-out range is $150,000 to $165,000 for singles and heads of household, and $236,000 to $246,000 for married couples filing jointly. These updates may allow higher-income earners to qualify for partial contributions. (Investopedia)

Automatic Enrollment in Retirement Plans

Beginning in 2025, certain new employer-sponsored retirement plans are required to automatically enroll eligible employees, starting with a contribution rate of at least 3% of the employee’s pay. Employees will have the option to opt out or adjust their contribution rate. This measure aims to increase participation in retirement savings programs. (Kiplinger)

These updates reflect ongoing efforts to improve retirement savings opportunities and provide flexibility for individuals planning their financial futures. It is advisable to consult a financial advisor to understand how these changes may impact your retirement strategy.  Interested in learning more about Self-Directed IRAs?  Contact American IRA, LLC at 866-7500-IRA (472) for a free consultation.  Download our free guides or visit us online at www.AmericanIRA.com.