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Roth IRA Limitations

Updated on May 12, 2010

Factors that Affect Your Roth IRA Eligibility

There are specific requirements that you should meet, if you want to become eligible in opening a Roth IRA. The Roth IRA limitations integrate two categories or natures of limits that fall under income limits and restrictions that influence how much you can contribute to your Roth IRA. These two factors significantly affect your eligibility from obtaining benefits from your retirement account.

Saving for your retirement years is never as comfortable as having a dependable Roth IRA plan. This grant you the opportunity to savor the advantages you can get out of saving after-tax assets aside from the tax-free withdrawals that you can carry-out when you reach your retirement year. You can make contributions in Roth investment plan whatever your age is and as long as you earn. After reaching your 59 ½th age, you are guaranteed to make tax-free distributions or withdrawals and there will no longer be forced minimum withdrawals after you reach the age of 70 ½.

Roth IRA Contribution Limitations

The limitations for Roth IRA investing on compensation are specifically guided by a set of rules mandated by the law. You should not be too much bothered by the limitations in compensation, though if your income is too much to handle, you may not be required to have a Roth IRA. When opening a Roth IRA, you will need to submit your AGI or adjusted gross income to the IRS, which is computed and assessed based on your federal income taxes reflected on your Form 1040. If you have no idea on your precise AGI, you can check your last year’s Form 1040 and find the reference for AGI on line 36.

The 2009 Roth IRA AGI phase out ranges, lay down the limits on how much you can contribute. As a single filer, you must earn up to $105,000, so you can be qualified for full contribution and up to $105,000 to $120,000 to be eligible for partial contribution. For joint filers, compensation should be up to the amount of $166,000 to meet the requirements for full contribution and up to $166,000 to $176,000 for partial contribution. For couples who are married but are filing separately, their salaries should be up to $0.00 for full contribution and for partial contribution should be up to $0 to $10,000.

Additional Roth IRA Limitations

Other Roth IRA limitations are the amount of contributions that you can make in a specific tax year. The precise limitations depend on two factors; your age and your income limitation. When you reach the age of 50 or older at the end of each year, you will be authorized and qualified to make additional contributions referred to as catch-up contributions. For the tax year 2009, the annual contribution limit amounts to $5,000, while the catch-up limit is set at $1,000.

It is important that you accurately distinguish how much you can contribute to your Roth individual retirement account yearly. To make this possible and find the best Roth IRA available, you can utilize various tools that can help you a lot to understand your retirement funding. These tools are retirement calculators and guides, which are dedicated in assisting you in your retirement investing.


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      Broad Financial 6 years ago

      Nice of you for bringing up this topic. It's been a nice reading the facts about Roth IRA Limitations.