2025 Retirement Flashcards by David DeWitt

What is the 2025 contribution limit for Traditional and Roth IRAs?

$7,000 ($8,000 if age 50+)

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What is the income phaseout range for Roth IRA contributions in 2025 (single filer)?

$146,000 to $161,000

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What is the income phaseout range for Roth IRA contributions in 2025 (married filing jointly)?

$230,000 to $240,000

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Can you contribute to both a Traditional IRA and a Roth IRA in the same year?

Yes, but the combined total cannot exceed the annual limit ($7,000 or $8,000 with catch-up).

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Are Traditional IRA contributions deductible?

It depends on income and whether the contributor or their spouse is covered by a workplace retirement plan.

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What is the employee deferral limit for 401(k) plans in 2025?

23500

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What is the catch-up contribution limit for participants aged 50+ in 2025?

7500

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What is the additional catch-up for those aged 60–63 starting in 2025?

$11,250 (indexed)

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What is the total 401(k) contribution limit (employee + employer) in 2025?

$76,000 (or $83,500 with catch-up contributions)

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Can a participant contribute to both a Traditional and Roth 401(k)?

Yes, but the total employee deferral limit applies across both account types.

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What is the 2025 SEP IRA contribution limit?

The lesser of 25% of compensation or $70,000

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Who can contribute to a SEP IRA?

Employers only, including self-employed individuals.

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How is SEP IRA contribution calculated for sole proprietors or single-member LLCs?

Approximately 20% of net self-employment earnings, after deducting half of SE tax.

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How is SEP IRA contribution calculated for S-Corp owners?

25% of W-2 wages paid to the owner.

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Can employees contribute to their own SEP IRA?

No, only employers can contribute.

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Can SEP IRAs accept Roth contributions?

No, SEP IRAs only allow pre-tax contributions.

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What is the SIMPLE IRA contribution limit in 2025?

16500

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What is the catch-up contribution limit for SIMPLE IRA in 2025?

3500

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What are the employer contribution options under a SIMPLE IRA?

Match up to 3% of compensation or contribute 2% of compensation for all eligible employees.

Can a business owner contribute to both a SIMPLE IRA and a 401(k)?

Not typically, unless they operate two entirely separate businesses with unrelated plans.

Who is eligible for a Solo 401(k)?

Self-employed individuals with no employees, other than a spouse.

What is the total Solo 401(k) contribution limit in 2025?

$76,000 (or $83,500 with catch-up contributions)

Can Solo 401(k)s accept Roth contributions?

Yes, but only for the employee deferral portion.

Can a Solo 401(k) accept rollovers from IRAs?

Yes, but not from Roth IRAs.

What is the 2025 HSA contribution limit for individuals?

4150

What is the 2025 HSA contribution limit for families?

8300

What is the HSA catch-up contribution limit (age 55+)?

1000

What are the HDHP requirements for HSA eligibility in 2025?

Minimum deductible of $1,600 (individual) or $3,200 (family)

What is the 'triple tax benefit' of an HSA?

Contributions are tax-deductible, growth is tax-free, and qualified withdrawals are tax-free.

What is a Roth conversion?

Moving pre-tax retirement funds to a Roth IRA, triggering income tax on the converted amount.

Why consider a Roth conversion?

To lock in current tax rates, create tax-free growth, and reduce future RMDs.

When is a Roth conversion especially beneficial?

During low-income years, early retirement, or market downturns.

Is there an income limit for Roth conversions?

No, anyone can convert pre-tax funds to a Roth IRA.

What is a Mega Backdoor Roth?

A strategy where after-tax contributions to a 401(k) are converted to a Roth IRA or Roth 401(k).

How much can be contributed via a Mega Backdoor Roth in 2025?

Up to $76,000 (or $83,500 with catch-up), minus employee and employer contributions.

What are the requirements for a Mega Backdoor Roth?

401(k) plan must allow after-tax contributions and in-service withdrawals or in-plan conversions.

Can you contribute to both a 401(k) and a Solo 401(k)?

Employee deferrals are shared between plans, but employer contributions are separate.

Can you contribute to both a SEP IRA and a 401(k)?

Yes, if from unrelated businesses, but total limits still apply.

Can you contribute to both a Traditional IRA and an HSA?

Yes, they have separate limits and are unrelated accounts.

How are SEP IRA contributions calculated for a sole proprietor or single-member LLC?

Approximately 20% of net income after deducting half of SE tax.

How are SEP IRA contributions calculated for an S-Corp owner?

25% of W-2 wages, not including distributions.

Can S-Corp owners contribute to SEP IRAs based on distributions?

No, only W-2 wages count toward SEP contributions.

What is a common mistake S-Corp owners make with SEP IRAs?

Trying to calculate based on total compensation instead of just W-2 wages.

Can a sole proprietor open a Solo 401(k)?

Yes, if there are no employees other than a spouse.

Can an S-Corp owner open a Solo 401(k)?

Yes, based on W-2 wages paid to the owner.

Which plan allows higher contributions for high-earning sole proprietors: SEP IRA or Solo 401(k)?

Solo 401(k), because it allows both employee and employer contributions.