2008 IRA Contribution Limits
As the year winds down, it’s time to start thinking about investment opportunities in 2008. As I’m sure you’re aware, some of the most attractive vehicles that U.S. investors have at their disposal are IRAs, which allow you to defer taxes, or grow your investments tax free. That being said, you’re limited in the amount that you can contribute to an IRA each year, and you can’t carry the unused portion of your contribution limit forward to future years.
The good news is that the contribution limits are increasing for 2008, as follows:
| Year | Under Age 50 | Age 50+ |
| 2002-2004 | $3,000/year | $3,500/year |
| 2005 | $4,000/year | $4,500/year |
| 2006-2007 | $4,000/year | $5,000/year |
| 2008 | $5,000/year | $6,000/year |
Note that individuals aged 50 and over are eligible for so-called “catchup” contributions, which result in a higher contribution limit. After 2008, contribution limits will be indexed for inflation (finally!) in $500 increments.
Published on October 5th, 2007 - 12 Comments
Filed under: Saving & Investing, Taxes
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A quick question: My wife is a stay-at-home mom who does not have earned income. We are both over 50. Can I contribute the full 5k to her account? or is the limit lower in this situation? Thanks
Comment by PaulD — Oct 5th 2007 @ 6:55 amDo you know where to find information about the income phase outs for IRAs? I know I’m really close to the limit, but the info on the IRS web site is just too convoluted to understand. Is there a chart somewhere that says, your AGI 58,000 = IRA deductibility $2500; 59,000 = $2000,etc? Or is it time I hired an accountant?
Comment by Bri — Oct 5th 2007 @ 11:14 amPaulD,
Yes, you can contribute to an IRA for a stay-at-home spouse. This is called a Spousal IRA. Check with your brokerage firm for details.
Comment by Compounding — Oct 5th 2007 @ 3:00 pmDeductibility goes away — but tax-deferred savings are good with or without the deductibility, assuming that you’re trying to maximize savings.
Comment by Jen — Oct 7th 2007 @ 7:40 pmtime to go ahead and make some budget adjustments. That’s an increase of ~$84 a month for those that deposit monthly for 12 months. it’s even less if you do 15 (you have until April 15th of the following year to invest).
Comment by thomas — Oct 8th 2007 @ 1:18 amI’m glad that the IRA deposit allowances have gone up nicely in the past few years. Everyone under 50 years of age should be trying their hardest to hit that 5,000 mark in 2008 as IRA contributions certainly are a great investment.
Comment by Aaron — Oct 10th 2007 @ 10:32 amI am 48 years old and have not been able to save no where close to the amount I will need for retirement my median income is 32k, I want to contribute monthly to an IRA. yes, I have a 401k contributing $160. biweekly. but, I need to do more. any suggestions?
Comment by Rebecca Adams — Nov 4th 2007 @ 7:40 amMy accountant told me last year that I’m not eligible to contribute to a Roth because I’m in a pension plan as well as a 401K - but I haven’t been able to find any documentation on it. Have you heard about this?
Comment by Ebony — Nov 4th 2007 @ 9:49 pmDo you have to have over $18,000.00 worth of contributions before you can deduct them on income taxes?
Comment by Elaine Emery — Mar 18th 2008 @ 6:09 pmElaine: I have no idea what you’re talking about. $18,000? Where did you get that number?
Can I still convert my IRA to a Roth IRA for tax year 2008?? I had expected a bonus that would have pushed me well over the $100K income limitation, but it will now be paid in January rather than December as planned so I am comfortably under the $100K limit for tax year 2008.
Thank you
Comment by RJ Hogan — Jan 17th 2009 @ 12:54 pmThe pension plan on my w-2 is marked can I contribute to an IRA for 2008!
Comment by Tom — Mar 4th 2009 @ 12:18 pm