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IRA Contribution Limits 2021

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Key takeaways

  • Traditional and Roth IRAs are powerful retirement savings tools, but there are yearly limits on how much you can contribute.
  • The 2021 Traditional IRA limit is $6,000 if you’re 49 and under and $7,000 if you’re 50 and over.
  • Traditional IRAs also have limits on how much of your contribution is tax-deductible based on your filing status, income, and whether you have access to a retirement plan at work.
  • The 2021 Roth IRA limit is based on your age, filing status, and income — there is no tax deduction, since you make Roth contributions post-tax.
  • When deciding how much to contribute to your IRA, consider your 401(k) employer match opportunities, how much you need to cover your routine expenses, and if you have any major payments coming up.

IRAs are a great retirement savings option with significant tax advantages. Most people open an IRA when they leave their job and roll over their 401(k) into a new retirement account. However, there are yearly IRA contribution limits that you need to know before making your contribution plan. These limits can change based on the type of IRA account and your income.

This guide will help answer the question, “How much can I contribute to an IRA?” for Traditional and Roth IRAs.

Contributions to your traditional IRA are made pre-tax. This means you don’t pay any taxes when you contribute, but will pay taxes when you withdraw later like in a standard 401(k). While this can be a great financial benefit, there are limits on how much you can contribute yearly.

How much can I contribute to my traditional IRA in 2021?

In 2021, your total IRA contribution limit is $6,000. However, if you’re 50 or older, you can contribute up to $7,000. This is your total IRA contribution limit—it applies to all your traditional IRAs and Roth IRAs combined. So, if you have multiple IRAs (traditional IRA and Roth IRA included), you can only contribute up to $6,000 or $7,000 across all accounts combined. We’ll cover some other limits on your Roth IRAs later in this guide.

To summarize, here are your contribution limits broken down by age group:

2021 contribution limits across all traditional IRAs and Roth IRAs
Under age 50 $6,000 total
Age 50 and over $6,000 + $1,000 = $7,000 total

Are there income limits for contributing to a traditional IRA?

There are no income restrictions that limit how much you can contribute to a traditional IRA, except that your income must be equal to or greater than your IRA contribution. In other words, you can’t contribute more than you earn to a traditional IRA.

Can I deduct my traditional IRA contribution from my taxable income?

Everyone likes to pay less in taxes! That brings us to an important question: are IRA contributions tax-deductible? Yes, but there are limits on how much you can deduct based on your filing status, income, and whether you have access to a retirement plan through your employer. Income restrictions use your Adjusted Gross Income (AGI)—this is essentially your yearly income minus specific deductions (e.g. student loan interest payments).

Here’s a summary of your income limits if you or your spouse have access to a retirement plan at work:

If your filing status is: And your modified AGI is: Then you can take:
Single or head of household $66,000 or less A full deduction up to the amount of your contribution limit
More than $66,000 but less than $76,000 A partial deduction
$76,000 or more No deduction
Married filing jointly $105,000 or less A full deduction up to the amount of your contribution limit
More than $105,000 but less than $125,000 A partial deduction
$125,000 or more No deduction
Married filing separately Less than $10,000 A partial deduction
$10,000 or more No deduction

The IRS provides further detail on calculating partial deductions if you fall into that category.

If neither you nor your spouse have access to a retirement plan at work, the limits are a bit different:

If your filing status is:And your modified AGI is:Then you can take:
Single, head of household, or qualifying widow(er)Any amountA full deduction up to the amount of your contribution limit
Married filing jointly or separately with a spouse who is not covered by a plan at workAny amountA full deduction up to the amount of your contribution limit
Married filing jointly with a spouse who has coverage via a plan at work$198,000 or lessA full deduction up to the amount of your contribution limit
More than $198,000 but less than $208,000A partial deduction
$208,000 or moreNo deduction
Married filing separately with a spouse who has coverage via a plan at workLess than $10,000A partial deduction
$10,000 or moreNo deduction

Do rollovers contribute to my yearly contribution limit?

No, rollovers from a 401(k) or IRA don’t contribute to your traditional IRA contribution limits and aren’t considered a new contribution.

That covers Traditional IRA contribution limits — now let’s look at some important considerations for Roth IRAs.

Your Roth IRA contributions are made post-tax. This means you pay taxes when you contribute but won’t owe taxes when you withdraw later. While some of the IRA contribution rules will be the same for traditional and Roth IRAs, there are some key differences about Roth IRAs.

How much can I contribute to my Roth IRA in 2021?

Roth IRA contribution limits are based on two things:

  1. Your age – this is the same as Traditional IRAs: $6,000 for those 49 and under, $7,000 for those 50 and older.
  2. Your filing status and income – this is different than traditional IRAs. Depending on your filing status and income, you’ll be able to contribute up to the age-determined limit, a reduced amount, or nothing to a Roth IRA.

The income limitations for contributing to a Roth IRA are determined by your filing status as well as your yearly income (measured in AGI). Check out this table to see where you fit in:

If your filing status is:And your modified AGI is:Then you can take:
Married filing jointlyLess than $198,000Up to $6,000 (49 and under) or $7,000 (50 and older)
At least $198,000 but less than $208,000A reduced amount
$208,000 or moreZero
Married filing separately and you lived with your spouse at any time during the yearLess than $10,000A reduced amount
$10,000 or moreZero
Single, head of household, or married filing separately and you did not live with your spouse at any time during the yearLess than $125,000Up to $6,000 (49 and under) or $7,000 (50 and older)
At least $125,000 but less than $140,000A reduced amount
$140,000 or moreZero

Can I deduct my Roth IRA contribution from my taxable income?

No, Roth contributions aren’t tax-deductible because you make Roth IRA contributions post-tax. The good news is when you withdraw from your account later, you won’t pay taxes. So, you could see significant tax advantages because you won’t pay taxes on your investment returns.

Do rollovers contribute to my yearly contribution limit?

No. Like traditional IRAs, rollovers don’t contribute to your Roth IRA contribution limit.

Like a lot of financial questions, the answer to this depends on your personal circumstances. Here’s are a few things to consider:

  1. Do you have access to a 401(k) account with an employer match? If so, make sure you’re taking full advantage of that before contributing to your IRA directly.
  2. Can you contribute and still have enough for your monthly budget needs?
  3. Do you have any significant payments to make in the near future – for example, a down payment on a house? Remember, you may not be able to withdraw from your IRA without taxes and penalties.

Contributing money to any type of IRA can be a productive way to save for retirement. How much you can contribute and deduct will depend on which type of IRA account(s) you have. You’ll always need to consider your age, but if you have a Roth IRA, you’ll also need to consider your filing status and yearly income. Importantly, you can only contribute up to $6,000 or $7,000 across all your IRA accounts, even if they’re different types. If you keep these limits in mind, you should be in the clear on your path to retirement.

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