Roth IRA is one of the most popular retirement plans which have actually gained the hearts of many individuals by making them satisfied with their savings without any tax deduction problems. This best retirement plan have opened the eyes of teenagers and blown a light in their mind to go ahead and plan for their futures in their early age of 20’s. Yes, a person in his 20’s can also take a Roth IRA plan. This is the main reason why this retirement plan is given much importance by every individual.
As we all know that in every retirement plan or pension plan there will be certain rules and limits which have to be followed by every individual so as to make their planning perfectly without any disturbances. In the same way there are some limits with Roth IRA retirement plan which is mandatory to know before taking this plan. So let us have some information about this Roth IRA limits in the following.
If we talk about these Roth IRA limits there are basically three types of limits and that is:
- Income limits:
Here the income limits of contribution completely depends upon an individual’s Modified Adjusted Gross Income. This Modified Adjusted Gross Income of an individual needs to be always below the certain margin of Roth IRA. If this MAGI exceeds or goes top of the margin then he/she may not be eligible for the contribution s in Roth IRA. We can also say that a parson will be eligible for full or partial contribution depending upon their Modified Adjusted Gross Income. Let us have some detailed information about this income limits with the help of below table.
Roth IRA income Limits of the year 2010:
|
Filers |
Qualify for a full contribution |
Eligible for partial contribution |
|
Singular Filer |
Up to $105,000 |
$105,000 – $120,000 |
|
Joint Filers |
Up to $169,000 |
$169,000 – $179,000 |
|
Married Couple (lived together for any part of the year) |
$0 |
$0 – @10,000 |
Therefore in the above table we get to find the income limits of Roth IRA of the year 2010. However, this Roth IRA income limits vary from year to year.
- Contribution Limits
This contribution limits again depends on the income and the age of an individual. The contribution amount for an individual will be $5000 if he/she is below the age of 50 and if he is above 50 then the contribution limit for Roth IRA would be $6000. Let us have a look on below table to get clear idea about this Roth IRA contribution limits.
|
Year |
Contribution limit |
Catch-up contribution (for tax payers age 50 or above, an additional to the normal contribution) |
|
2007 |
$4,000 |
$1,000 |
|
2008, 2009, 2010 |
$5,000 |
$1,000 |
|
2011 |
$5,000 |
$1,000 |
|
2012 |
$5,000 |
$1,000 |
- Conversion limits
There are certain limits for converting from traditional IRA to Roth IRA depending upon the modified adjusted gross income which again vary from year to year. As this conversion limits completely depends upon the MAGI if a person does not meet the conversion limits of Roth IRA then he/she will not be eligible to convert from traditional IRA to Roth IRA.
Therefore above mentioned are the Roth IRA limits which is very mandatory to follow which in turn will help you in leading luxurious life with your best savings. So, it is time for you to go through with all the limits and rules of Roth IRA and do not be late in opening this wonderful retirement plan.