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Home » IRA's, Roth IRA

2014 Maximum IRA Contributions Announced

Last updated by on 3 Comments

2014 Maximum Roth & Traditional IRA Contribution Maximums

As with the 2014 maximum 401K contribution, there was also no change with the 2014 maximum IRA contribution limit – which will stay the same as the 2013 maximum IRA contribution at $5,500.

This applies to both the Traditional IRA’s and Roth IRA’s (you can have each, but the max contribution is for both combined).

The IRS adjusts maximum contribution limits according to changes in the consumer price index (CPI) – and determined that the annual rise in the CPI was too low (~1.5%) to make any changes to the maximum.

Over the last decade or so, when they increase the limits, they usually do it in $500 increments and when you’re talking about a $5,500 maximum, a $500 increase is about 10%.

So… we could be stuck here for a while. The maximum IRA contribution had been stuck at $5,000 since the 2008 calendar year until the 2013 increase to $5,500.

2014 Maximum IRA Catch-up Contribution

2014 maximum IRA contributionFor those age 50 and over, the 2014 IRA catch-up contribution will stay the same, at an additional $1,000. Since the standard contribution is at $5,500, this means the 2014 maximum catch-up contribution is $6,500 in total.

You are eligible for the catch-up contribution if you turn 50 during any day in the calendar year.

2014 Traditional IRA Income Limits

IRA’s provide a great way to limit your tax liability in the present (Traditional IRA) and in the future (Roth IRA). There are, however, contribution phaseout limits that are based on your income. The good news is that those limits (also tied to CPI) will increase in 2014, even though there was not a contribution increase.

Keep in mind that with Traditional IRA’s, the limits and phaseouts only dictate how much you can deduct from your taxes, not if you can contribute or not. With Roth’s, the limits and phaseouts dictate how much  you can actually contribute, since Roth contributions are not deductible.

Traditional IRA income limits vary slightly from Roth IRA’s (which I’ll get to in a bit) in that they are tied to whether or not you your employer sponsors a retirement plan for you.

If you DO HAVE a retirement plan with your employer:

  • Single or head of household: If your MAGI is $60,000 (up from $59,000) or less, you can take a full deduction. If more than $60,000, but less than $70,000 (up from $69,000) – you get a partial deduction. If over $70,000, you cannot take a deduction.
  • Married filing jointly or qualifying widow(er): If your MAGI is $96,000 (up from $95,000) or less, you can take a full deduction. If more than $96,000, but less than $116,000 (up from $115,000) – you get a partial deduction. If over $115,000, 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 DO NOT 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 $181,000 or less, you can take a full deduction. If more than $181,000 (up from $178,000), but less than $191,000 (up from $188,000), you can take a partial deduction. If $191,000 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.

2014 Roth IRA Income Limits

The 2014 Roth IRA income phaseout limits are as follows:

  • Married filing jointly or qualifying widow(er): If your modified gross adjusted income (MAGI) is $181,000 (up from $178,000 in 2013) or less, you can contribute up to the $5,500 max. If at least $181,000 up to $191,000 (up $3,000 over 2013), your contribution limit is phased out (see IRS publication 590). If $191,000 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 $114,000 (up from $112,000 in 2013), you can contribute up to the $5,500 maximum. If at least $114,000 up to $129,000 (was $127,000 in 2013), your contribution limit is phased out. If $129,000 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 will phase out. If $0, you can contribute up to the $5,500 maximum ($6,500 if over 50 years old). If $10,000 and above, you cannot contribute to a Roth IRA.

Taking Advantage of IRA’s

If you have old 401K’s sitting around from jobs long forgotten, you should consider consolidating your 401K’s and rolling over to an IRA. IRA’s typically have lower fees associated with them. I have a Roth and Traditional IRA with TradeKing.

Also, note that you can still contribute to your IRA’s for the 2013 calendar year up until the tax deadline next April. And you can begin contributing for 2014 on Jan. 1, 2014.

Will you contribute to an IRA for the 2013 and 2014 calendar years? How much?


About the Author
I am G.E. Miller, & this is my story. My goal is financial independence ASAP. If you share that goal, join me & 7,500+ others by getting FREE email updates. You'll also find every post by category & every post in order.


3 Comments »
  • Steve says:

    I contribute the max every year into a Roth IRA, which is through Vanguard. At my employer, the 401K selection isn’t too great and has somewhat high fees so after I get the max employer match, I make sure to max out the Roth IRA first as soon as I can each year (max time in market). Then I contribute what I comfortably can into my 401K, though I don’t max that out quite yet.

  • Ryan says:

    I’ve only had my Roth IRA for a couple years but I’ve managed to max it out every year so far. However I’ll be headed to school full time for the next few years. I still plan to max it out next year. But after that I’ll be a bit more conservative and probably only contribute 30-40% until I get another full time job.

  • Anne says:

    I guess I need to consider consolidating my 401K’s and rolling over to an IRA if IRA has lower fees.

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