How much can I contribute to my IRA?
You want to be able to live just as comfortably during retirement as you did when you were working. One of the best ways to enhance your financial security down the road is with an Individual Retirement Arrangement or IRA. The IRS sets a maximum IRA contribution limit annually based on the consumer price index. This is the maximum amount one can contribute to an IRA during a given year. Fortunately for 2019, the maximum IRA contribution actually increased for the first time in 6 years. The standard maximum contribution limit for 2019 is $6,000 for the under 50 age group. For those over 50, the catch-up contribution is an additional $1,000 so the standard contribution plus the catch-up contribution results in a maximum IRA contribution of $7,000.
IRA’s originated back in 1975. We have gone from a standard maximum IRA contribution in 1998 of $2,000 to a maximum IRA contribution in 2019 of $6,000. If there is only one IRA, then the limit applies to that one. However, if you have both a Traditional IRA and a Roth IRA, the limit applies to the combination of the two.
There are phaseouts for Roth IRAs based on your annual Modified Adjusted Gross Income and your filing status. If you are single or married filing separate, contribution limits are lower if income is above $122,000 and non-existent if income exceeds $137,000. If you are married filing jointly or are a qualifying widow or widower, contributions lessen if income is above $193,000 and non-existent if income exceeds $203,000. If you are married filing separately, contribution limits are lower if the income is above $0 and non-existent if income exceeds $10,000.
With Roth IRAs or Traditional IRAs, contributions don’t end the last day of the tax year. You have up until the tax deadline to contribute the full allowable amount.