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Home » IRA's, Retire, Roth IRA

IRS Maximum Traditional & Roth IRA Contribution Limits for 2011

Last updated by on 6 Comments

Update: If you are looking for the 2012, 2013, or 2014 maximum IRA contribution limits – I have since posted these as well.

In my 2011 maximum 401k contribution post last week, a commenter asked if there was any change in the 2011 maximum IRA contribution limits. There are some slight tweaks in the income limits, but not in the amount you can contribute.

2011 IRA Maximum Contribution Limits

As announced by the IRS a few weeks ago, the 2011 maximum IRA contribution and deduction limits will be the same as 2010 maximum IRA contribution limits, at $5,000 per calendar year. However, there are some slight changes to the phase out limits that I’ll go into.

Everyone should have IRA’s at their side, as they are a great way to limit your tax liability in the present (Traditional IRA) and in the future (Roth IRA). But there are limits on how much you can contribute to each, and those limits have changed slightly for 2011.

2011 Roth IRA Income Limits

2011 maximum IRA contribution

  • Married filing jointly or qualifying widow(er): If your modified gross adjusted income (MAGI) is $169,000 (up from $166,000 in 2010), you can contribute up to the $5,000 max. If at least $169,000 up to $179,000 (both up $3,000 over 2010), your contribution limit is phased out (see IRS publication 590). If $179,000 (up from $176,000) and above, you cannot contribute to a Roth IRA.
  • Single, head of household, or married filing separately and you did not live with your spouse at any time during the year: If under $107,000 (up from $105,000 in 2010), you can contribute up to the $5,000 maximum. If at least $107,000 up to $122,000 ($120,000 in 2010), your contribution limit is phased out. If $122,000 and up, you cannot contribute to a Roth IRA.
  • Married filing separately and you lived with your spouse at any time during the year: If MAGI is between $0 and $10,000, your contribution limit is phase out. If $0, you can contribution up to the $5,000 maximum ($6,000 if over 50 years old). If $10,000 and above, you cannot contribute to a Roth IRA.

Traditional IRA Income Limits

Traditional IRA income limits vary slightly in that they are tied to whether or not you your employer sponsors a retirement plan for you.
  • Single or head of household: If your MAGI is $56,000 or less, you can take a full deduction. If more than $56,000, but less than $66,000 – you get a partial deduction. If over $66,000, you cannot take a deduction.
  • Married filing jointly or qualifying widow(er): If your MAGI is $90,000 or less, you can take a full deduction. If more than $90,000, but less than $110,000 – you get a partial deduction. If over $110,000, no deduction.
  • Married filing separately: If your MAGI is less than $10,000, you can take a partial deduction. If $10,000 or more, no deduction.

If you DON’T have a retirement plan through an employer:

  • Single, head of household, or qualifying widow(er): Any MAGI permits a full deduction.
  • Married filing jointly or separately with a spouse who is not covered by a plan at work: Any MAGI permits a full deduction.
  • Married filing jointly with a spouse who is covered by a plan at work: If your MAGI is $169,000 or less, you can take a full deduction. If more than $169,000, but less than $179,000, you can take a partial deduction. If $179,000 or more, no deduction at all.
  • Married filing separately with a spouse who is covered by a plan at work: If your MAGI is less than $10,000, you can claim a partial deduction. If $10,000 or more, no deduction.

What is the IRA Catch-up Contribution Maximum?

For people over the age of 50, there is a ‘catch-up’ contribution that equals a combined $6,000 (an additional $1,000).

What if I have a Roth & a Traditional IRA – Does that Double the Contribution Limits?

No. The contribution limits are the combination of the two, and you can have both, if you’d like. It’s a smart strategy to have both available to you because it allows you to diversify your tax strategy. Traditional IRA’s allow you to get a tax break now, while Roth IRA’s result in a tax break in retirement.

Where to Start an IRA

I have both my Traditional and Roth IRA at TradeKing, because the IRA’s have no fees and their trade prices are only $4.95.

IRA Discussion:

  • How much do you plan on investing in your 2010 IRA contribution?
  • What about your 2011 IRA contribution?
  • Do you have both a Roth and Traditional IRA? Which do you contribute to more?

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6 Comments »
  • Josh says:

    I don’t mind Roth IRA’s. But I don’t understand why people choose them. Sure they have some good features, but retirement planning shouldn’t be this way. Your retirement plan needs to be your future plan. However, many people choose plans that get them into trouble if they trip or fall down financially in their 40′s and 50′s (like we are seeing today). There are better vehicles to plan your retirement through that not only give you tax benefits, give you the liquidity you need to use your money in a time of need.

  • Daddy Paul says:

    Good info on the limits. I really like having both a traditional and a Roth. I convert part of my traditional to a Roth when the market is down.
    Trade King is not a bad place to have your IRA. I would recommend most people start with a no load fund such as Gabelli, Royce or Hodges. When you have your money at a brokerage you are too tempted to trade. Investing with a no load family have no fees.

  • Chris says:

    Thanks for providing this info. I have a Roth IRA and I contributed the max in 2010… I’ll probably max out again in 2011 so long as I don’t hit the income limit phase outs.

  • Frankie M says:

    I don’t have a regiment plan at work and neither does my wife. I contribute to traditional Ira every yr. The IRS send me a letter asking me for 3500$ + 209$ in interest. IRS wrong?

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