2010 IRA Contribution Limits

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2010 IRA Contribution Limits

The 2010 IRA contribution limits remain the same as they have been since 2008: You can contribute up to $5,000 to an IRA in 2010 and an additional $1,000 if you are 50 or older.

What Are IRA Contribution Limits?

IRA contribution limits dictate how much you can save in an individual retirement account (IRA) each year. Whether you choose to contribute tax-free dollars to a traditional IRA (that will be taxed when you withdraw the money) or contribute after-tax dollars to a Roth IRA (which you can draw from tax-free at retirement), the government imposes annual IRA contribution limits on your total IRA contributions.

Any IRA contributions you make between January 1st and April 15th of the following year can count to one particular tax year. The contributions do not have to be made all at once, and if you do not use your contribution allowance one year, you lose that benefit. (I.e., you cannot deposit more the next year if you did not contribute anything this year).

2008, 2009 and 2010 IRA Contribution Limits

$5,000 for investors ages 49 and below
$6,000 for investors 50 and above

2010 Roth IRA Income Limits

There are income limitations on Roth IRA contributions. In 2010, married individuals who file jointly can contribute $5,000 ($6,000 if 50 or older) to a Roth IRA only if their modified adjusted gross income (MAGI) is below $167,000. If their MAGI is between $167,000 and $177,000, then they can contribute some amount less than their full limit.

There are maximum income limits for Roth IRA contributions. During 2010, married individuals who have modified adjusted gross income (MAGI) up to $167,000 can contribute the full amount. If their MAGI is between $167,000 and $177,000, then they can contribute some amount less than their full limit. If their MAGI is more than $177,000, they may not contribute to a Roth IRA in 2010. (These figures went up by $1,000 from 2009).

Single filers can earn up to $105,000 to make a full contribution and must phase out contributions if they earn between $105,000 to $120,000 in 2010.