Roth IRA Income Limits: Understanding the Phase-Out Ranges

Many investors do not understand how the Roth IRA phase out works or what it means to them. Here are the basics of the ranges in a Roth IRA phaseout.

What Is a Phase Out?

The Roth IRA phase out is an income range that people can contribute a partial amount to their Roth IRA. The maximum contribution to a Roth IRA is $5000 per year. If you are over 50, you can contribute $6000. In order to make this will contribution, you have to be below a certain income level. If you are barely above that income level, you may fit into the phase out range and be able to make a partial contribution.

Phase Out Ranges

If you are an individual, you have to make below $105,000 in order to make a full contribution. If you make between $105,000 and $120,000, you will qualify for a partial contribution.

If you are married and file your taxes jointly, you can contribute fully if you make less than $166,000 per year. If you are married and make between $166,000 and $176,000 per year, you will be in the phase out range can be able to make a partial contribution to your Roth IRA.