Self-Directed IRA Contribution Limits

If you’re looking to take control of your retirement investments, understanding Self-Directed IRA contribution limits is essential. A Self-Directed IRA (SDIRA) allows you to diversify beyond traditional stocks and bonds into assets such as real estate, private businesses, precious metals, and more. However, like any IRA, the IRS sets annual contribution limits, and staying within these limits ensures your account remains compliant and tax advantaged.

For 2026, the IRS increased IRA contribution limits to reflect cost-of-living adjustments:

• $7,500 if you’re under age 50
• $8,600 if you’re age 50 or older (which includes the now COLA-adjusted $1,100 catch-up contribution)

Understanding these limits and how they interact with deductions, Roth income thresholds, and workplace plan coverage is key to maximizing your tax benefits and long-term retirement strategy.

Understanding Self-Directed IRA Contributions

A Self-Directed IRA contribution is the money you deposit into your IRA each year to fund your retirement. You can contribute to a Self-Directed traditional or Roth IRA, depending on your income level, tax strategy, and eligibility. When you contribute to a Self-Directed IRA, the funds are first sent to your custodian or administrator. Once the contribution is made, you can use your IRA to invest in a wide range of assets allowed by the IRS, from private companies to real estate.

The SECURE Act of 2019 eliminated the age cap on traditional IRA contributions. That means you can now continue contributing to your Self-Directed IRA even after age 73, as long as you have earned income.

Tip: If you’re self-employed or a small business owner, you may also consider a Self-Directed SEP IRA or Solo 401(k) for higher contribution potential.

Why the IRS Sets IRA Contribution Limits

You might wonder why the IRS restricts how much you can contribute to a Self-Directed IRA each year. The main reason is to limit how much income can receive preferential tax treatment. IRA contribution caps help balance the tax advantages between retirement savers and ensure fairness across income levels.

These limits also encourage long-term savings rather than large, one-time tax shelters. The IRS adjusts these limits periodically to reflect cost-of-living increases, though the 2025 IRA contribution limits remain unchanged from 2024.

Contributing Less Than the Maximum

You’re not required to contribute the full annual limit. Whether you add $500 or $7,500, your money still grows tax-deferred (traditional IRA) or tax-free (Roth IRA). However, if you contribute less than the maximum, you cannot make up the difference in the following tax year.

For example, if you contribute $4,000 in 2026 and skip the remaining $3,500, you can’t add that unused amount in 2027. Each year’s limit is independent.

Learn More: What are Alternative Assets?

Roth IRA Income Limits for 2026

While Self-Directed Roth IRAs have the same contribution caps as traditional IRAs, eligibility is based on income.

• Single filers: Full contributions allowed for incomes under $153,000; phased out between $153,000–$168,000.
• Married filing jointly: Full contributions under $224,000; phased out between $224,000–$252,000.

If your income exceeds the phase-out range, you can’t contribute directly to a Roth IRA. However, many investors use a Roth conversion (or “Backdoor Roth”) to move funds from a traditional Self-Directed IRA into a Roth IRA, allowing tax-free growth later on.

Related: Traditional vs. Roth IRA: What’s Best for You?

Spousal Contributions and Joint Returns

If only one spouse earns income, both can still contribute to individual IRAs by filing a joint tax return. This is called a Spousal IRA contribution.

Your combined contributions cannot exceed your total taxable compensation for the year or the combined annual limits. In other words, even if one spouse has no earnings, both can fund their IRAs up to the $7,500 or $8,600 limit each, provided there’s enough earned income reported on the joint return.

Contributing When You Have a Work Retirement Plan

You can contribute to a Self-Directed IRA even if you already participate in an employer-sponsored plan such as a 401(k) or SIMPLE IRA. However, your ability to deduct contributions to a traditional IRA may be limited depending on your income.

For 2026, if you’re covered by a workplace plan, your deduction phase-out ranges are:

• Single filers: $81,000–$91,000
• Married filing jointly (contributing spouse covered): $129,000–$149,000
• If you’re not covered but your spouse is: $242,000–$252,000

Even if you don’t qualify for a full deduction, contributing to a Self-Directed IRA still gives you access to alternative investments.

Learn more: How to Open a Self-Directed IRA LLC

Conclusion

Navigating the contribution limits of Self-Directed IRAs is crucial for maximizing your retirement savings. For 2026, individuals under 50 can contribute up to $7,500, while those 50 and older can contribute up to $8,600, thanks to the $1,100 catch-up provision. It’s important to note that these limits apply across all your IRAs combined.

Additionally, there are no income restrictions for establishing a Self-Directed IRA, offering greater flexibility in retirement planning. However, contributions must be made directly to the IRA custodian and not to your LLC. Remember, if you contribute less than the maximum, you cannot make up the difference in the following tax year. By understanding and adhering to these limits, you can effectively leverage your Self-Directed IRA to build a diverse and robust retirement portfolio.

Maximize Your Retirement Savings with a Self-Directed IRA

Understanding the contribution limits for your Self-Directed IRA is crucial to optimizing your retirement strategy. Whether you’re under 50 or 50 and over, our experts can guide you through the contribution process to ensure you’re making the most of your retirement plan.

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