Roth and Traditional IRA Contribution Limits

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Retirement Nest EggsI, like many other personal finance bloggers, am a huge fan of IRAs because they give you a tax-advantaged opportunity to save for your retirement. Both types, the Roth and the Traditional, offer tax benefits that are hard to find anywhere else. The Roth IRA offers you to reap the growth of your retirement assets tax free while the Traditional IRA gives you an immediate tax benefit for contributing to your own future.

There’s a reason why the IRS puts contribution limits on IRA accounts. As many of you know, you have until April 15th to make a contribution to your Traditional or Roth IRA for the 2009 tax year. What you may not know is how much you’re able to contribute.

IRA Contribution Limits

In addition to the current year’s contribution limit, I’ve also included some historical limits to put the current IRA contribution limit into a bit of perspective (as you can see, not much has changed!):

Tax Year Contribution Limit Catch-Up (50+)
2006-7 $4,000 $1,000
2008 $5,000 $1,000
2009-2012 $5,000 $1,000
2013 $5,500 $1,000

The value in the “Catch-Up” column is how much more someone aged 50 and over can contribute towards their IRA.

Roth IRA Phaseout

With the Roth IRA, your contribution is limited by your modified adjusted gross income and the phaseout starts at $112,000 for single filers, $178,000 for married filing jointly). Rather than explain all the math, I created a calculator that does the math for you. May I present this very simple Roth IRA phaseout calculator. If you provide your modified adjusted gross income and your filing status, it will tell you how much you can contribute.

(Photo: dawnzy)

{ 25 comments, please add your thoughts now! }

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25 Responses to “Roth and Traditional IRA Contribution Limits”

  1. Nick says:

    And that maximum is a total across both types, right? So if you had a traditional IRA and a Roth, and you contributed 3000 to the Roth, then you could only contribute up to 2000 to the traditional?

  2. CK says:

    what’s the age for the catchup? 50 plus?

  3. jsbrendog says:

    is there a future in sight with increased contribution amounts?

  4. Chuck says:

    The limits are indexed to inflation, so an increase would not really be a benefit, because it would be roughly the same amount in real terms.

    • jsbrendog says:

      yeah i didn’t consider this. good point. although it wouldn’t be exactly the same but it wouldn’t be a huge increase

      • NateUVM says:

        Still, a future increase WOULD be a good thing, if not an outright “improvement,” per se. If, as time goes on, there are no increases, your ability to contribute (amount you can contribute in real terms) would progressively decrease. And that’s not good.

        • jsbrendog says:

          truth. so basically due to inflation we have been able to contribute less every year even though the rate has remained static. totally didn’t even consider this.

  5. Great reminder. I forgot to contribute to my Roth IRA this past year, so I have to make sure to get the contribution in before April. It’s great that they give us more time to contribute beyond the end of the year.

  6. Shirley says:

    For the ‘youngsters’ out there that are on the edge of whether or not to create, or contribute more, to an IRA right now… do it!

    What may seem like a small amount right now will be a large amount of your income once you are retired and that comes more quickly than you think it will. Been there, done that, so thankful now that I did.

    • BrianC says:

      Very good advice, Shirley. I started about 10 years ago and am so glad I did. I’m sure if I didn’t contribute to my Roth, I wouldn’t have any sort of nest egg today.

    • jsbrendog says:

      this. I try to convince all my friends to open it and put in as much or as little as possible. do something!!! because it will add up and make your life easier as you get older. alas, too many people my age don’t look that far ahead

    • billsnider says:

      Hi Shirley,

      I am over 65 and retired (should have done that 40 years ago).

      I worked for three different companies. In each case they did away with my pension. I rely almost exclusively on what I saved (don’t feel bad for me – I made some good investments).

      The point here is that it is never to early to save and live by the 100 rule. Invest 100 minus your age in the stock market, diversify, don’t be afraid to take risks and invest the MAX into some IRA account.

      Good luck.


    • ziglet19 says:

      When I was 18, my mom had me open a Roth IRA account, and motivated me to contribute by matching whatever I put in the first year. I am in my late 20s and have been contributing most years since – she set a great example, one I hope to follow with my children someday.

      • jsbrendog says:

        his is awesome. she deserves a medal. my parents spent my college fund before i think i even got to high school so a contrast in examples set.

        this is something I would definitely try to implement with my future kids as well some day

  7. govenar says:

    I think the Roth IRA phaseout effectively no longer applies as of 2010, since you can make nondeductible contributions to a traditional IRA and then convert to a Roth IRA.

  8. cubiclegeoff says:

    How does converting to a Roth IRA from traditional affect your contribution amounts, or does it not matter?

    • NateUVM says:

      It shouldn’t change how much you can contribute. You’re just changing the tax treatment of funds that are already in an account, not contributing additional funds to that account.

  9. AMP says:

    I changed jobs, and am rolling over a small ($3,500) 401k to a Traditional IRA. Does that count as a contribution?

  10. thomas says:

    ridiculous that the limits are this small. once again, savings and self reliance are not what the gov’t wants from us.

  11. Kamantha says:

    The article never explained why is there a contribution limit at all for retirement. I tend to agree with Thomas that the govt really doesnt want people to be self reliant and the lip talk they give on retirement accounts isnt really the truth.

  12. spoonbean says:

    I’m with Kamantha, JIM:you wrote “There’s a reason why the IRS puts contribution limits on IRA accounts.”

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