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ira contribution limit

IRA Contribution Limits for Both Roth and Traditional

By //  by Khaleef Crumbley

Below you will find the IRA Contribution Limits for 2017, 2016, and 2015. Unfortunately, there were no adjustments made to the 2016 contribution limits of IRAs – both Roth and Traditional. Therefore, Roth IRA contribution limits and Traditional IRA contribution limits will remain the same as this year.

Combined Traditional and Roth IRA Contribution Limits:

201720162015
Traditional IRA Contribution Limit$5,500$5,500$5,500
Roth IRA Contribution Limit$5,500$5,500$5,500
IRA Catch-Up Contribution $1,000 $1,000 $1,000
Total IRA Contribution Limit for Those Over 50$6,500$6,500$6,500

For those of you who will be under 50 years of age at the end of the year, the total of your Roth IRA Contribution Limit and your Traditional IRA Contribution Limit is $5,500. However, if your total taxable compensation for the year is less than $5,500, then your IRA contribution limit is equal to the amount of your taxable compensation for 2017.

The maximum deductible contribution to a traditional IRA and the maximum contribution to a Roth IRA may be reduced depending on your modified adjusted gross income.

IRAContributionLimits

As with the 401k, if you are 50 years of age or older before the end of 2017, then you will be allowed to make a “catch-up” contribution in the amount of $1,000. This will bring your IRA contribution limit to the lesser of $6,500 or the total of your taxable compensation for 2017. This limit can be split between a Traditional IRA and a Roth IRA but the combined limit is $6,500.

For those of you who would rather contribute to an IRA over a 401k because of the added flexibility, please keep in mind that you should still contribute an amount to your 401k that will allow you to take advantage of the full 401k employer match. If not, then you are essentially throwing away free money!

Be sure to refer to these charts from the IRS (linked above) for those who are covered and those who are not covered by a retirement plan at work. Also, see how your Modified AGI affects the amount of Roth IRA Contributions that you can make for 2017.

photo by o5com

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Filed Under: Retirement, Taxes Tagged With: 401, 401(k) ira matrix, 403, adjusted gross income, contribution, contribution limit, finance, financial economics, individual retirement accounts, internal revenue service, IRA, ira contribution limit, ira contribution limits, IRS, limited, pension, roth, roth ira, roth ira contribution limit, roth ira contributions, traditional ira, traditional ira contribution limit

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