Roth IRA Contribution Limits

Roth IRA contribution limits are one of the reasons that people will vie for getting traditional IRA packages rather than the Roth IRA. If you are in the school of thought that getting the Roth IRA is the better choice, you may very well be right. However, you also need to make sure that you keep in mind the different aspects that are important to remember concerning the Roth IRA contribution limits. You need to learn everything that you can so that you do not make the decision about which individual retirement arrangement will be the best for you based on faulty or incomplete information. If you are looking into getting this kind of IRA package, then you first need to learn about the basics of the plan and the Roth plan rules, as well as what the Roth IRA contribution limits are.

Roth vs. Traditional

The first thing that you need to know is that the Roth IRA is different from the traditional one. This is because, unlike the traditional individual retirement arrangement, the Roth individual retirement arrangement is tax free. This means that when you make a contribution or when you take money out of the arraignment plan, you will not be taxed for that transaction. This is one of the reasons that the most people want to get this kind of package; because it is free of taxes. However, being free of taxes if oft considered a double edged sword. This is because, though you will not be taxed on the transactions that you make, you will also not be able to get any kind of tax rebate because the Roth plan is not tax deductable. This is just one of the sad truths about this kind of plan. However, there are other things that you need to know about the Roth IRA contribution limits and the plan in general before you make your decision. One of these things is the Eligibility of the plan.

Individual Retirement Arrangement Eligibility

With this kind of IRAs, the eligibility works in an income level system. The limits system can be a little tricky to understand. However, in reality, it is relatively cut and dry.

If you are filing by yourself, then you have an income limit for full giving to the plan. You cannot make any more than $105,000 each year and still be able to qualify for full contribution for this plan. This means that if you make a penny more than $105,000 per year, then you can no longer have this kind of plan. However, you can still make up to $120,000 each year and still qualify for partial contribution. This means that you can make $15,000 more each year and still retain some of the benefits.

If you are filing with your spouse, then the limits works a little differently. You can make up to $169,000 each year and still qualify for this kind of policy if you are filing jointly. That is the sum of both of your incomes. If you want partial benefit and make more, you can make up to $179,000 jointly and still be able to get partial benefits. Now that you understand this information about the eligibility limits, take a look at what the Roth IRA contribution limits are.

The Limits

The Roth IRA contribution limits work in a very specific way that is largely unlike any other IRA plan that is out there. Though it is somewhat similar to the traditional individual retirement arrangement, it is unique in the specifics. The specifics of the contribution will be based on the year that is being filed. It will change based on your income as well as your age. For instance, if you were to file in 2010 and you were 50 years of age and you made $105,000 per year, you would be limited to $6,000 of contribution that year. This is based on the age that you are as well as your income and the time. This number will change from year to year, but generally speaking, it will be based on these three factors. You might have to do some research to better determine what the numbers will be for you, but it will always come down to these three factors in dealing with Roth IRA contribution limits.

Though the Roth IRA contribution limits will be different for everyone, all in all, the limits will come down to the factors mentioned earlier on. Age and income will be great contribution factors in the Roth IRA contribution limits that you will have. You just need to figure out what the specifics are for what you might be able to add to the plan according to your limits and what you cannot add.

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