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Traditional IRA and Roth IRA Contribution Limits

Beginner's Corner

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Various US currency (focus on fifty dollar bank note)
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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 2010, 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 2010, 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 2009, you can't deposit $7,000 in 2010 [the $5,000 + the $2,000 you didn't deposit the prior year]. You cannot contribute more than the total allowable amount during any fiscal year.)

For more information, read our Guide to Retirement Account Contribution Limits. You can also visit our special, 101 Things Every New Investor Should Know About Stocks.

IRA Contribution Limits

YEAR AGE 49 & BELOW AGE 50 & ABOVE
2002-2004 $3,000 $3,500
2005 $4,000 $4,500
2006-2007 $4,000 $5,000
2008 $5,000 $6,000
2009 $5,000 $6,000
2010 $5,000 $6,000
2011 $5,000 $6,000
2012 Indexed to Inflation Indexed to Inflation
2013 Indexed to Inflation Indexed to Inflation

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