Roth IRA Contribution Phase-Out Rules Explained

28 October 2025

Saving for retirement is one of those things we all know we should do, but figuring out the best way to do it? That’s where things get tricky. One of the most popular options is a Roth IRA, thanks to its tax-free withdrawals in retirement. But here’s the catch—not everyone qualifies to contribute the full amount.

That’s where the Roth IRA contribution phase-out rules come into play. These rules determine whether you can contribute the full amount, only a partial amount, or nothing at all. So, if you’re wondering where you stand, keep reading. We'll break it all down in plain English!

What Is a Roth IRA?

Before we dive into the nitty-gritty of phase-out rules, let’s take a quick refresher on what a Roth IRA actually is.

A Roth Individual Retirement Account (IRA) is a tax-advantaged retirement savings account where you contribute after-tax money. The big perk? Your money grows tax-free, and you can withdraw it tax-free in retirement (as long as you follow the rules).

Benefits of a Roth IRA:

- Tax-Free Growth – Once your money is in, it grows without Uncle Sam dipping his hands into it.
- Tax-Free Withdrawals – When you retire, you can take out your money without paying taxes on it.
- No Required Minimum Distributions (RMDs) – Unlike traditional IRAs, you’re not forced to start withdrawing at a certain age.

Sounds great, right? But there’s a catch—not everyone can fully contribute to a Roth IRA due to income limits. That’s where the phase-out rules come in.

Roth IRA Contribution Limits for 2024

For 2024, the maximum contribution limit for a Roth IRA is:
- $6,500 for individuals under 50 years old
- $7,500 if you're 50 or older (thanks to the catch-up contribution rule)

But here’s the twist: not everyone qualifies to contribute the full amount, and that’s based on something called Modified Adjusted Gross Income (MAGI).

What Is MAGI and Why Does It Matter?

MAGI (Modified Adjusted Gross Income) is essentially your gross income with certain tax deductions added back in. It’s used to determine your eligibility for a Roth IRA.

If your MAGI is too high, your ability to contribute starts to phase out—hence the term "Roth IRA contribution phase-out."

Roth IRA Income Limits and Phase-Out Ranges for 2024

For Single Filers & Head of Household

- MAGI below $146,000 → You can contribute the full amount ($6,500 or $7,500 if 50+).
- MAGI between $146,000 – $161,000 → Your contribution amount is phased out (reduced).
- MAGI above $161,000 → You cannot contribute to a Roth IRA.

For Married Couples Filing Jointly

- MAGI below $230,000 → You can contribute the full amount.
- MAGI between $230,000 – $240,000 → Your contribution amount is phased out.
- MAGI above $240,000 → You cannot contribute.

For Married Filing Separately (If You Lived With Your Spouse)

- MAGI less than $10,000 → You can contribute, but at a reduced amount.
- MAGI above $10,000 → You cannot contribute.

If your income falls within these phase-out ranges, you need to calculate how much you can contribute.

How to Calculate Your Reduced Roth IRA Contribution

So, what happens if your MAGI falls within the phase-out range? You can still contribute to a Roth IRA, but you’ll need to reduce your contribution based on IRS guidelines.

Here’s a simple formula to figure it out:

1. Start with your MAGI
2. Subtract the lower end of the phase-out range
3. Divide by the total phase-out range
4. Multiply by the maximum contribution limit
5. Subtract that number from your maximum contribution

Example Calculation:

Let’s say you’re a single filer with a MAGI of $152,000 in 2024.

- The phase-out range starts at $146,000, so:
$152,000 - $146,000 = $6,000
- The total phase-out range is $15,000, so:
$6,000 ÷ $15,000 = 0.4 (or 40%)
- The max contribution is $6,500, so:
$6,500 × 0.4 = $2,600
- Finally:
$6,500 - $2,600 = $3,900 (your reduced contribution limit)

So, instead of contributing the full $6,500, you’d be limited to $3,900.

How to Contribute When You’re Above the Income Limits

If your income is too high to contribute directly to a Roth IRA, don’t panic! You still have options:

1. Backdoor Roth IRA

A backdoor Roth IRA is a legal loophole that allows high-income earners to get around the income limits. Here’s how it works:
- Contribute to a Traditional IRA (which doesn’t have income limits).
- Then, convert it into a Roth IRA (you’ll owe taxes on any pre-tax money).
- Boom! You now have Roth IRA savings, legally avoiding the income restrictions.

2. Employer-Sponsored Roth 401(k) Contributions

If your employer offers a Roth 401(k), you might want to contribute there instead. These accounts don’t have income limits like Roth IRAs do.

3. Spouse Contribution Strategy (If Married)

If your spouse earns less or qualifies for full Roth IRA contributions, they might be able to contribute on behalf of the household.

Common Questions About Roth IRA Phase-Out Rules

What Happens If I Contribute Too Much?

If you accidentally contribute more than allowed, you’ll face a 6% penalty on the excess amount every year it remains in the account. To fix this:
- Withdraw the extra amount before the tax deadline.
- Or, recharacterize the excess into a Traditional IRA.

Do Roth IRA Income Limits Change Every Year?

Yes! The IRS adjusts these limits annually based on inflation, so be sure to check each year’s updated numbers.

Can I Have a Roth IRA and a Traditional IRA?

Yep! You can contribute to both, but your total contributions across both accounts can’t exceed the limit ($6,500 or $7,500 for 50+ years old).

Final Thoughts

A Roth IRA is an amazing tool for growing tax-free retirement savings, but the contribution phase-out rules can be a frustrating roadblock. Fortunately, by understanding the income limits and using creative strategies (like the Backdoor Roth IRA), you can still take advantage of its benefits.

At the end of the day, the best retirement plan is the one that works for you. So, if you’re eligible to contribute, don’t wait—start investing in your future today!