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CONTRIBUTION RULES
Learn even more about this topic with the Encyclopedia of Personal Finance™

As in the traditional IRA, the most one individual can contribute each year is $4,000 ($4,500 for an individual age 50 or older). The most a married couple filing taxes jointly can contribute is $8,000 per year ($9,000 when both individuals are age 50 or older).

How much you may contribute is limited. If single, head of household, or married filing separately and did not live with our spouse, you are allowed to contribute the full amount as long as your adjusted gross income (AGI) does not exceed $95,000 per year. Participation in employer retirement plans does not limit your participation as it does in a traditional IRA. The Roth contribution is phased out when your adjusted gross income exceeds $95,000. At $110,000, your allowed contribution drops to $0.

If you are married and you and your spouse are filing taxes jointly, your limit on adjusted gross income is $150,000. At $160,000, your allowed contribution drops to $0. For every additional $50 of AGI you make after $150,000, you must reduce your contributions by $10. Participation in other qualified retirement plans is not a barrier.

If you are married, lived with your spouse, and are filing separately, you are allowed to contribute up to $4,000 as long as your adjusted gross income (AGI) does not exceed $10,000 per year. Participation in other qualified retirement plans is not a barrier.

You may simultaneously contribute to a traditional IRA, as long as the total put into both accounts does not exceed $4,000 ($4,500 if you are age 50 or older). If you are married, the same amounts may be contributed to a spousal IRA.

To determine how much you may contribute to your Roth IRA, use Worksheet 2-2, in IRS Publication 590 (http://www.irs.gov/pub/irs-pdf/p590.pdf).

What if you need to take out the money in your Roth before you retire?




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