To maintain a comfortable lifestyle in retirement, you generally need to start your golden years with savings or have access to income outside of Social Security.

The typical retired worker today collects a Social Security benefit of only about $1,922 a month, which translates into an annual income of about $23,000. That may be enough to just scrape by -- but forget about having money for extras like hobbies, travel, and entertainment.

When it comes to building savings for retirement, you have choices. You could participate in a retirement plan sponsored by your employer. But if such a plan isn't available to you, an individual retirement account (IRA) may be your next-best bet.

The IRS just announced 2025's IRA contribution limits. So if you're someone who aims to max out your IRA, you'll want to pay attention.

IRA limits aren't changing in 2025

Currently, IRA contributions max out at $7,000 for workers under the age of 50 and $8,000 for those 50 or older. In 2025, these limits are staying the same.

You may find that surprising if you're aware that the SECURE 2.0 Act of 2022 allowed for an annual cost‑of‑living adjustment to IRA catch-up contributions. But remember: Just because that catch-up limit can increase doesn't mean that it will increase every year. As such, it's holding steady at $1,000 for 2025.

There are benefits to funding an IRA for retirement

One drawback of IRAs is that they have much lower contribution limits than 401(k)s. Next year, 401(k)s will max out at $23,500 for savers under 50 and $31,000 for those 50 or over. Plus, many employers offer 401(k) matches that help workers boost their savings.

But that doesn't mean you won't enjoy your share of perks in an IRA. For one thing, if you fund a traditional IRA, your contributions can shield some of your income from taxes. Also, IRAs offer some key benefits over 401(k)s.

First, you can open an IRA at any financial institution that offers one. This gives you the opportunity to shop around for a retirement plan that works for you. With a 401(k), you're limited to the plan your employer offers.

Second, IRAs allow you to hand-pick stocks for your investment portfolio, whereas 401(k) plans commonly limit you to a selection of funds. This freedom to choose is advantageous for a few reasons.

Not only do you get complete control over the assets you're putting your money into, but some 401(k) funds charge exorbitant fees (known as expense ratios) that can seriously eat away at returns. With an IRA, you can take steps to avoid hefty investment fees and build a portfolio that has the potential to deliver returns that outpace those of the stock market as a whole.

It may be disappointing to hear that IRA limits aren't rising in 2025. But you can still do a world of good for your retirement by maxing out in the new year.

And remember: You don't have to limit your retirement savings to $7,000 or $8,000 in 2025. Once you max out your IRA, you can look at other accounts for retirement savings purposes, like health savings accounts (HSAs) or even a taxable brokerage account.

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