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IRA limits

Lesson in Course: Work in progress (beginner, 5min )

IRA limits

As of 2020, the maximum catch-up contributions that we can make is $6,500 once we’re older than 50.

As of 2020, the maximum contribution that we can make to our IRAs is $6,000 or $7,000 if we’re over 50; however, these contributions are considered separate from the employer-sponsored plans. This means that we can max out on both our 401(k) and IRA.

Income limits on contributions for IRAs

It’s important for us to participate early because of the income limitations on contributions when we start earning more.

Traditional IRAs 

When we start earning more, we begin to lose our tax-deduction on our contributions to our Traditional IRAs—while we can still contribute, we just won’t receive a tax benefit.

  • The deduction limits if we are covered by a plan are here.
  • The deduction limits if we aren't covered by a plan are here.

Roth iras

With Roth IRAs, high income earners are unable to make direct contributions altogether.

  • The Roth income limits for 2020 can be found here.
  • The Roth income limits for 2021 can be found here.

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