Traditional IRA and Roth IRA Contribution Limits

Regardless of the type of IRA you choose, the Federal government imposes annual contribution limits. The chart below shows the maximum dollar amount individuals are allowed to deposit into their IRA each year. After 2008, the contribution limit will raise in increments of $500 depending upon the level of inflation.

Deposits into your IRA do not have to be made at the same time. (For example: In the year 2008, a 35 year old woman could deposit $416.67 into her IRA each month. At the end of the year, it would add up to the maximum $5,000.)

Due to the tax advantages of investing through an IRA, it is normally best to try and make the maximum annual contribution. The use-it-or-lose-it nature of contributions makes this all the more important (e.g., If you deposit $3,000 in 2008, you can't deposit $7,000 in 2009 [the $5,000 + the $2,000 you didn't deposit the year before]. You cannot contribute more than the total allowable amount during any fiscal year.)

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