Roth IRA Contribution Limits and Income Phaseout Schedule

The Roth IRA contribution limits are:

Year 49 And Under 50 And Over
2005 $4,000 $4,500
2006-7 $4,000 $5,000
2008 $5,000 $6,000

As you can see, if you’re over 50 then you’re given a “catch-up” contribution.

The income phaseout schedule is based on your modified adjusted gross income, which is your income minus some deductions. The income phaseout schedule is:

Filing Status Income Floor Income Ceiling
Single, Head of Household $95,000 $110,000
Married Filing Separately $0 $10,000
Married Filing Jointly $150,000 $160,000

The phaseout is linear, so if you are single then at $95,000 then you could contribute $4,000 in 2006. If you made $110,000 then your contribution is $0. If you made $100,000, then your contribution would be limited to $1333.33.

One little known fact: If you’re under the income ceiling, your phaseout’s minimum contribution is $200. So, if your MAGI were $109,999, your contribution limit is $200, not some miniscule proportionate number.






8 responses to “Roth IRA Contribution Limits and Income Phaseout Schedule”

  1. […] I think the first thing I’ll do is change jobs. Maybe I’ll become a money manager, one who people can trust. And maybe I’ll be able to reach our Roth IRA contribution limits, possibly even end up saving 12% of my salary for retirement. And for once, we’ll start to accumulate savings instead of living paycheck to paycheck. Yes, that would be quite nice–to be able to secure my retirement without stress or worries. […]

  2. What if you put in $4k at the beginning of 2007, but at the end of the year you’ve gone over the income limit? What do you do? Take it out? What about the earnings on the money?

  3. retirehappy

    You can reclassify a portion of it to a Traditional IRA or withdraw it and pay some penalties, I recommend reclassifying it.

  4. Ann

    If I make less than 110K and contribute to a 403B, can I still contribute to a Roth?

  5. retirehappy

    It depends on how high your AGI is…

  6. Rachell

    Can I contribute to my existing roth ira(now) for the year 2008?

    Thank you,

  7. retirehappy

    No you can’t contribute for the future

  8. Jamie

    Can I contribute to both a Traditional IRA and a 401K, and would the limits be different?