Retirement Account Limits
- Individual retirement plans, the IRA and Roth IRA, are set up and funded by the account holder. The 2010 and 2011 contribution limit for IRAs for those under 50 years of age is $5,000. The limit for those 50 years of age and older is $6,000. These are total dollars that can be split between an IRA and Roth IRA, assuming individuals qualify. There are rules for contributing to traditional IRAs based on income as well as participation and eligibility for an individual's company retirement plan. Roth IRA eligibility is based on modified adjusted gross income (AGI). The full $5,000 or $6,000 contribution per person can be made if a couple filing jointly makes $167,000 or less in 2010. The 2011 modified AGI for Roth IRA contributions is $169,000 for couples filing jointly. The AGI is $105,000 for 2010 and $107,000 for 2011 for single filers.
- Contributions to traditional IRAs and Roth IRAs can be made as late as the tax filing deadline.TAX TIME image by brelsbil from Fotolia.com
Individuals have until the tax filing deadline to fund an IRA for the year. Assuming an individual files their taxes on time, the deadline for 2010 tax returns is Monday, April 18, 2011. Funding for 2011 can be made anytime during the 2011 calendar year and up to the filing deadline in 2012. The IRS will announce any changes in contribution limits for 2012 during the latter part of 2011. - Retirement contribution guidelines are similar for 401(k), 403(b), and 457 qualified retirement plans. For-profit companies customarily offer a 401(k) plan. Non-profit organizations traditionally provide 403(b) plans. The 457 plan is available primarily for certain government employees. The 2010 and 2011 limit for all three plans is $16,500. The catch-up provision for individuals 50 years of age and older is $5,500. Employees over the age of 50 can contribute a maximum of $22,000 into their retirement plan.
- SIMPLE IRA retirement plans were established as a convenient means for small businesses to fund employee retirement accounts without the costs of oversight, rules and regulations required of 401(k) and similar qualified plans. The 2010 and 2011 contribution limit is $11,500. The catch-up provision is $2,500. Employees 50 years of age and older can contribute up to $14,000 to a SIMPLE IRA account.
- Contribution limits for employer-sponsored plans are the total dollars an employee can contribute to a personal retirement account. Limits do not include any employer contribution, which is separate and in addition to the employee amount. Employer contributions vary. It is best to consult the company to find out the employer's input and payment formula.
