Best Retirement Plans USA 2025 – Compare 401(k), IRA, Roth, SEP, SIMPLE & More
Updated for tax year 2025. All key limits verified with official IRS guidance linked throughout.
Choosing the right retirement plan in 2025 comes down to three things: tax timing (pre-tax vs. Roth), contribution space, and your employment situation (employee vs. self-employed). This guide compares 401(k), Roth 401(k), 403(b), 457(b), Traditional IRA, Roth IRA, Solo 401(k), SEP IRA, SIMPLE IRA, and HSA—with the newest IRS limits and practical decision rules you can use today.
- If you’re an employee: Grab the full employer match first, then consider a Roth IRA (or Traditional IRA if you expect a lower tax bracket in retirement), then increase 401(k) contributions.
- If you’re self-employed with no employees: A Solo 401(k) typically allows the highest shelter at moderate income levels.
- If you’re self-employed with employees: Compare SIMPLE IRA (low admin) vs. SEP IRA (very simple, but same % for staff) vs. a full 401(k).
- Health-care angle: If you have an HSA-eligible HDHP, an HSA is a powerful “triple-tax-advantaged” retirement bucket.
What Changed for 2025 (Official Limits)
| Item (2025) | Limit | Source |
|---|---|---|
| 401(k)/403(b)/most 457(b) employee deferral | $23,500 (age 50+ catch-up $7,500); special age 60–63 catch-up $11,250 (plan permitting) | IRS Newsroom, Notice 2024-80 (PDF) |
| IRA (Traditional + Roth combined) | $7,000 (age 50+ total $8,000) | IRS Newsroom |
| Roth IRA income phase-outs | Single: $150k–$165k | MFJ: $236k–$246k | Fidelity explainer (reflecting IRS) |
| SIMPLE IRA employee deferral | $16,500 (age 50+ catch-up $3,500; plan-specific higher catch-ups may apply at 60–63) | Notice 2024-80 (PDF) |
| Defined contribution plan annual additions (e.g., Solo 401(k) total cap) | $70,000 (excludes regular age-50 catch-up) | Notice 2024-80 (PDF) |
| HSA contribution limits | Self-only: $4,300 | Family: $8,550 | Age 55+ catch-up: $1,000 | Rev. Proc. 2024-25 (PDF) |
| RMD start age | 73 (first by Apr 1 of the year after you turn 73; then annually by Dec 31) | IRS RMD page |
Note: These are national IRS limits; individual plan rules can be stricter. Always confirm with your plan’s Summary Plan Description.
How to Choose Quickly
- Get your match first. Contribute enough to capture 100% of your employer match—that’s a guaranteed return.
- Tax now vs. tax later. Expect higher future tax rates? Favor Roth. Expect lower future rates? Favor pre-tax.
- Self-employed? No employees → Solo 401(k). With employees → compare SIMPLE IRA, SEP IRA, or a full 401(k).
- HSA eligible? Add an HSA for the triple tax advantage, especially for long-term medical costs.
The Plans (Who They’re Best For)
401(k) & Roth 401(k) (private sector) / 403(b) (nonprofits) / 457(b) (government)
2025 deferral limit is $23,500 with a standard age-50+ catch-up of $7,500; some plans allow a special $11,250 catch-up for ages 60–63. See IRS Newsroom and Notice 2024-80. Many 457(b) plans also offer a separate three-year pre-retirement catch-up (plan specific).
- Pros: High limits, employer money (match/non-elective), payroll automation, Roth option in many plans.
- Cons: Investment menus/fees vary; early withdrawals can be penalized; loans are plan-dependent.
- Best for: Employees, especially where a meaningful employer match exists.
Traditional IRA
Combined IRA limit: $7,000 (age-50+ total $8,000). Deductibility phases out at higher incomes if you or a spouse is covered by a workplace plan—see IRS Newsroom. Tax-deferred growth; RMDs start at age 73.
Roth IRA
Same dollar limit as IRA ($7,000 / $8,000 age 50+), but direct contributions are subject to income phase-outs (Single: $150k–$165k, MFJ: $236k–$246k in 2025). See Roth IRA income thresholds. No lifetime RMDs; qualified withdrawals are tax-free.
Solo 401(k)
For owner-only businesses. Combines the employee deferral (up to $23,500) with employer profit-sharing (generally up to ~20–25% of eligible comp), capped b
