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 In this publication, we're going to discuss IRA contribution limits. That will include the recent changes for 2008 and 2009. We will also address two kinds of IRA limits, one dealing with household income, and a second dealing with the dollar value of the contributions themselves.
IRA Contributions
For many years, the contribution limit for an IRA stood at $2,000, but policymakers have realized that inflation made this old limit inadequate in meeting the retirement planning needs of individuals. So if you are using IRAs to fund retirement, we have some good news about the 2008 and 2009 limits. We will even discuss the catch-up limit that can help you get more money into your IRA faster.
To help you to better understand some of the 2008 and 2009 changes, we are going to separate the IRA contribution limits for traditional IRAs, Roth IRAs and SIMPLE IRAs when we need to. If we don't specifically identify the limit or contribution rule for a particular IRA, you can assume that the commentary applies to all three.
Older IRA Contribution Limits
If you're looking at your old tax records or trying to figure out how much you might have contributed to an IRA in the past, then take a look at our sister article on IRA Contribution Limits 2004 and 2005.
IRA Contribution Limits for 2008
In 2008, the contribution limits on traditional IRAs and Roth IRA increases to $5,000. If you reach the age of 50 before the end of the calendar year, then you're entitled to an additional catch-up contribution of $1,000. That brings your total to $6,000 if your age 50 or older by the end of 2008.
Traditional IRA Income Limits for 2008
In 2008, the adjusted gross income or AGI contribution limits for traditional IRAs were raised. If you are covered by retirement plan at work, then your tax-deductible contribution to a traditional IRA is phased-out if:
- Your filing status is married filing jointly and your AGI is more than $85,000 but less than $105,000.
- Your filing status is single, head of household and your AGI is more than $53,000 but less than $63,000.
- Your filing status is married filing separate returns your deductible phase-out starts at under $10,000.
IRA Contribution Limits for 2009
In 2009, the contribution limits on traditional IRAs and Roth IRA remains at $5,000. If you reach the age of 50 before the end of the calendar year, then you're entitled to an additional catch-up contribution of $1,000. That brings your total to $6,000 if your age 50 or older by the end of 2009.
Traditional IRA Income Limits for 2009
In 2009, the adjusted gross income or AGI contribution limits for traditional IRAs were raised. If you are covered by retirement plan at work, then your tax-deductible contribution to a traditional IRA is phased-out if:
- Your filing status is married filing jointly and your AGI is more than $89,000 but less than $109,000.
- Your filing status is single, head of household and your AGI is more than $55,000 but less than $65,000.
- Your filing status is married filing separate returns your deductible phase-out starts at under $10,000.
SIMPLE IRA Contribution Limits in 2008 and 2009
In 2008, the employer salary-reduction contribution that applies to SIMPLE IRAs was raised to $10,500. For workers that are age 50 and older, your employer can make additional "catch up" contributions of $2,500, bringing the total contribution limit in 2008 for SIMPLE IRAs to $13,000. In 2009, the employer salary-reduction contribution was raised to $11,500, bringing the total contribution limit in 2009 to $14,000.
Roth IRA Income Limits in 2008
One of the nice features of the Roth IRA is that anyone - at any age - can contribute to a Roth as long as they have some form of compensation and a non-working spouse. The following income limit rules apply to Roth IRAs:
- Single filers with modified adjusted gross income up to $101,000 can make a full contribution. If your adjusted gross income is in excess of $116,000, then you cannot make a contribution to a Roth IRA.
- Joint filers with modified adjusted gross income up to $159,000 can make a full contribution. If your adjusted gross income is in excess of $169,000, then you cannot make a contribution to a Roth IRA.
Roth IRA Income Limits in 2009
In 2009, the following income limit rules apply to Roth IRAs:
- Single filers with modified adjusted gross income up to $105,000 can make a full contribution. If your adjusted gross income is in excess of $120,000, then you cannot make a contribution to a Roth IRA.
- Joint filers with modified adjusted gross income up to $166,000 can make a full contribution. If your adjusted gross income is in excess of $176,000, then you cannot make a contribution to a Roth IRA.
Contribution Limits in 2008 and 2009
The contribution limits for traditional and Roth IRA moves up to $5,000 starting in 2008 and remains there in 2009. The catch up contribution for those ages 50 and older by the end of 2008 / 2009 will remain at $1,000. Therefore, you can contribute up to $6,000 to a Roth or traditional IRA if you're age 50 and older.
Current IRA Contribution Limits
To make it simple, we are going to translate most of the above information into a couple of simple tables that provide at a glance look at contribution and income limits for IRAs. These tables only apply to Roth IRAs and traditional IRAs. Most SIMPLE plans are administered by your employer and rules may vary.
Traditional IRA Contribution Limits (2006 - 2010)
| Year |
Standard Contribution |
With Catch-Up Contribution |
| 2006 |
$4,000 |
$5,000 |
| 2007 |
$4,000 |
$5,000 |
| 2008 |
$5,000 |
$6,000 |
| 2009 |
$5,000 |
$6,000 |
| 2010 |
Indexed with Inflation |
Indexed with Inflation |
2008 Traditional IRA AGI Deduction Limits
(If Covered by a Retirement Plan at Work)
| Filing Status |
Full Deduction |
Phase Out |
No Deduction |
| Single, head of household |
$53,000 or less |
$53,000 - $63,000 |
$63,000 or more |
| Married filing jointly |
$85,000 or less |
$85,000 - $105,000 |
$105,000 or more |
| Married filing separately |
|
Less than $10,000 |
$10,000 or more |
2009 Traditional IRA AGI Deduction Limits
(If Covered by a Retirement Plan at Work)
| Filing Status |
Full Deduction |
Phase Out |
No Deduction |
| Single, head of household |
$55,000 or less |
$55,000 - $65,000 |
$65,000 or more |
| Married filing jointly |
$89,000 or less |
$89,000 - $109,000 |
$109,000 or more |
| Married filing separately |
|
Less than $10,000 |
$10,000 or more |
2008 Traditional IRA AGI Deduction Limits
(If NOT Covered by a Retirement Plan at Work)
| Filing Status |
Full Deduction |
Phase-Out |
No Deduction |
| Single, head of household |
No Limit |
No Limit |
No Limit |
| Married filing jointly (spouse not covered) |
No Limit |
No Limit |
No Limit |
| Married filing jointly (spouse covered) |
$159,000 or less |
$159,000 - $169,000 |
$169,000 or more |
| Married filing separately (spouse covered) |
|
Less than $10,000 |
$10,000 or more |
2009 Traditional IRA AGI Deduction Limits
(If NOT Covered by a Retirement Plan at Work)
| Filing Status |
Full Deduction |
Phase-Out |
No Deduction |
| Single, head of household |
No Limit |
No Limit |
No Limit |
| Married filing jointly (spouse not covered) |
No Limit |
No Limit |
No Limit |
| Married filing jointly (spouse covered) |
$156,000 or less |
$156,000 - $176,000 |
$176,000 or more |
| Married filing separately (spouse covered) |
|
Less than $10,000 |
$10,000 or more |
Roth IRA Contribution Limits (2006 - 2009)
| Year |
Standard Contribution |
Catch-Up Contribution |
| 2006 |
$4,000 |
$5,000 |
| 2007 |
$4,000 |
$5,000 |
| 2008 |
$5,000 |
$6,000 |
| 2009 |
$5,000 |
$6,000 |
2008 Roth IRA Income Limits
| Filing Status |
Full Contribution |
Contribution Phased Out |
No Contributions |
| Single Filers |
$101,000 |
$101,000 - $116,000 |
$116,000 or more |
| Joint filers |
$159,000 |
$159,000 - $169,000 |
$169,000 or more |
2009 Roth IRA Income Limits
| Filing Status |
Full Contribution |
Contribution Phased Out |
No Contributions |
| Single Filers |
$105,000 |
$105,000 - $120,000 |
$120,000 or more |
| Joint filers |
$166,000 |
$166,000 - $176,000 |
$176,000 or more |
Most of this information is detailed in our articles on Traditional IRA Rules and Roth IRA Contribution Limits. Additional information on these contribution rules can be found on the IRS website.
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