In recent years, IRAs have taken on renewed relevance as investors seek greater control over their portfolios.
IRA utilization rose to 44% in 2024, up 10% from a decade prior, underscoring increasing enthusiasm for more flexible retirement savings options.1 Alongside traditional public market exposure, there is growing interest in using IRAs to access alternative assets such as private equity, private credit and real estate. Regulatory updates, inflation adjustments, and the continued rollout of the SECURE 2.0 Act have further reshaped how investors think about IRA strategy, particularly for those with more complex portfolios or exposure to private markets.
IRAs have long served as a cornerstone of retirement planning for Americans. Designed to encourage long-term savings through tax advantages, IRAs give individuals a way to grow capital outside of employer-sponsored plans while maintaining meaningful flexibility around investment choice and tax strategy. With over $17 trillion currently held in IRAs, they are the largest retirement account type by dollars.2
As different provisions of the SECURE 2.0 Act continue to go into effect, it’s crucial for investors to stay abreast of how key components of retirement saving regulations like contribution limits and required minimum distributions are changing.
IRA contribution limits and income thresholds, 2025–2026
For 2026, regular IRA contribution limits are now $7,500 for individuals under age 50 (up from $7,000 in 2025) and $8,600 for those age 50 and older (up from $8,000 in 2025). These limits are indexed to inflation.
Income thresholds governing deductibility for traditional IRAs and eligibility for Roth IRAs have been adjusted for inflation for both 2025 and 2026. Modified adjusted gross income, or MAGI, determines whether contributions are fully allowed, partially phased out, or disallowed altogether.
For investors near these thresholds, annual monitoring is essential. Income changes, bonus compensation, or liquidity events can affect eligibility and may require alternative planning strategies, such as backdoor Roth contributions where appropriate.
Recent regulatory updates
Legislative and regulatory changes continue to shape how IRAs function in practice, particularly with respect to distributions and compliance. The SECURE 2.0 Act was passed by Congress in December 2022 and aims to strengthen and expand retirement planning options for Americans. There is a staggered rollout for different features of the Act, with some such as an increased RMD age enacted at the start of 2023, and others like the saver’s tax credit for low- to middle-income retirement savers beginning in 2027.
Below are a few of the key changes introduced in the SECURE 2.0 Act that retirement savers should be aware of.
Required minimum distributions (RMDs)
Under the SECURE 2.0 Act, the age at which RMDs begin has increased to 73, effective December 31, 2023, up from 72 previously. This change allows additional years of tax-deferred or tax-free growth before mandatory withdrawals commence.
Penalties for failing to take an RMD have also been reduced under updated IRS rules, though they remain significant. For inherited IRAs, the 10-year rule introduced under prior SECURE legislation generally requires full distribution of the account within ten years, with ongoing clarification around annual distribution requirements for certain beneficiaries.
Catch-up contributions
SECURE 2.0 introduced higher catch-up contribution limits for certain workplace retirement plans for individuals aged 60 through 63, effective as of January 1, 2026. While these changes do not directly alter IRA limits, they influence broader retirement planning decisions for investors coordinating multiple account types.
Treasury and IRS guidance has also addressed Roth catch-up rules for high-income participants in employer plans, with implementation beginning in 2027.
IRS clarifications
The IRS has released updated guidance on safe harbor provisions and RMD calculations, providing additional clarity for retirement account holders and plan administrators. These updates are particularly relevant for investors with inherited accounts or complex beneficiary structures.
IRA rules impacting self-directed investors
Self-directed IRAs follow the same foundational rules as other IRAs with respect to contributions, RMDs, and beneficiaries. However, the nature of alternative assets introduces additional planning considerations.
RMD timing can be more complex when assets are illiquid, making advance planning essential. Non-spouse inheritors face heightened scrutiny under the 10-year rule, especially when private assets are involved. Contribution and income phase-outs also indirectly affect self-directed IRA strategies by limiting the ability to add new capital.
Equally important are the rules around prohibited transactions and disqualified persons. Violations can result in significant tax consequences, including loss of the account’s tax-advantaged status.
Retirement accounts trends
The SECURE 2.0 Act continues to influence retirement planning well beyond its initial passage. Automatic enrollment provisions and expanded plan features aim to increase participation, while inflation indexing has driven contribution limit increases in 2026, and may continue to do so in 2027.
For investors focused on private markets, these trends underscore the importance of integrating IRAs into a broader, long-term strategy rather than treating them as static accounts.
Practical takeaways for investors
Investors benefit most from IRAs when they align account type with long-term goals and tax expectations. Staying current on contribution limits and income thresholds helps avoid missed opportunities or unintended penalties.
RMD planning is particularly critical for those holding alternative assets, where liquidity constraints can complicate distributions. Coordinating IRA strategies with overall tax, estate, and investment planning ensures that these accounts support, rather than constrain, broader financial objectives.
IRAs remain a flexible and durable foundation for retirement planning. While the core principles have endured, recent regulatory changes and inflation adjustments continue to shape how these accounts are used.
For investors seeking exposure to private markets, self-directed IRAs offer expanded possibilities, provided that compliance with contribution rules, RMD requirements, and prohibited transaction guidelines remains top of mind. With thoughtful planning, IRAs can continue to play a central role in sophisticated, long-term wealth strategies.
1. ICI, “IRA Ownership Reaches Record Highs” (April 2025).
2. Ibid.
