Traditional IRA Contribution Rules: Limits & Guidelines

Learning IRA contribution rules can help you avoid any problems with funding your account. IRAs are a fantastic tool for funding your eventual retirement. However, if you do not play by the rules, you could invalidate your account or face penalties. 

IRA Contribution Limits

When you open either a traditional IRA or Roth IRA, you are subject to the same yearly contribution limits. If you are under the age of 50, you can put up to $5000 per year into your IRA. If you are over the age of 50, the government will allow you to contribute $6000 towards your account. This is a provision that allows those over the age of 50 to catch up a bit on their retirement savings. 

IRA Contribution Eligibility

With a traditional IRA, there are no income restrictions. Regardless of how much money you make, you can contribute to an IRA. However, Roth IRAs have a maximum income restriction. If you are single and you make less than $105,000, you can contribute fully to your Roth IRA. If you are married and file taxes jointly, you can earn up to $166,000 and contribute fully. If you make between $105,000 and $120,000 as an individual, you can make partial contributions. If married, you can partially contribute at an income between $166,000 and $176,000.