As we head into the weekend, I want to continue looking ahead to 2013. So let’s talk a bit about IRA contribution limits.
According to the IRS, the 2013 contribution limits for traditional and Roth IRAs will increase from from $5,000/year to $5,500/year.
For participants who are at least 50 years old, the “catch-up” contribution remains unchanged at an additional $1,000/year.
Please note that these are combined limits. Thus, you can contribute a combined maximum of $5,500/year (or $6,500/year if you’re 50+) to traditional and/or Roth IRAs — i.e., you can’t contribute the max to both.
Please also note that your contributions cannot exceed your taxable compensation for the year. That being said, an exception is made for non-working spouses…
Assuming that the couple files jointly, the non-working spouse is allowed to fund a so-called “spousal IRA”.
As I did for the 401(k), 403(b), and 457(b) contribution limits, I though it might also be useful to provide some historical perspective. Here are the traditional and Roth IRA contribution limits going all the way back to 2005.
As with our other retirement accounts, we’re already contributing the max to our IRAs (more on that in the future) and we’ll be increasing our contribution in 2013 to track this increase.
Some final notes:
- These limits apply to new contributions and not to rollovers
- Your ability to deduct traditional IRA contributions is limited by income
- Your ability to contribute to a Roth IRA is limited by income
I’ll cover these latter two points sometime in the near future.
Relevant queries: spousal ira contribution limits 2013, 2013 education ira contribution limits, education ira contributions for 2013, spousal ira 2013, 2013 spousal rothe ira contribution limit, spousal roth ira 2013 limit.