2009 Traditional and Roth IRA Contribution Limits
With less than two months to go before 2009, I though it would be worth taking a look at IRA contribution limits for 2009. As of 2008, contribution limits are indexed to inflation and will increase in $500 increments (as necessary). Unfortunately, there’s not much to report here, as the limits are staying the same in 2009 as they were in 2008. What follows is a table of contributions limits starting back in 2002, and running through next year.
| 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 |
| 2009 | $5,000/year | $6,000/year |
The silver lining here is that the cutoffs for making Roth IRA contributions and for deducting Traditional IRA contributions have increased 2009.
Roth IRA Contribution Thresholds
If you’re married and filing jointly, you can make your full Roth IRA contribution as long as your modified adjusted gross income (MAGI) is below $159k, and your ability to contribute phases out entirely at $169k. For single filers, the thresholds are $101k and $116k.
Traditional IRA Deduction Thresholds
If you’re married and filing jointly, you can make deduct your full Traditional IRA contributions as long as your MAGI is below $85k, and your ability to deduct contributions phases out entirely at $105k. For single filers, the thresholds are $53k and $63k.
Deadlines for Contributing
Remember, you can make 2008 contributions all the way up to April 15, 2009. As for 2009 contributions, you can start as early as January 2nd, 2009 with a deadline on the back end of April 15, 2010.
Source: IRS.gov*
*As of this writing, the IRS has not released Publication 590 for 2008. However, this information (for 2008) can be found in the 2007 version of Publication 590, as well as from multiple other reputable sources.
Published on November 7th, 2008 - 14 Comments
Filed under: Retirement, Saving & Investing
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Two things to add to this. First of all, since you have up until April 15, 2009 to make 2008 contributions, you can use your tax refund as your IRA contribution. With the average refund being over $2,100, there is no reason not to put at least a portion of your money away. Secondly, a lot of family can qualify for the retirement savings tax credit. It is worth $200-$1,000 (depending on income level and filing status). If a taxpayer is getting $2,100 back and decides to put $1,000 into an IRA, then their refund could be as much as $500 higher. In addition, if you contribute to a traditional IRA, you also are able to reduce your taxable federal and (most) state income. For a married couple making $50,000 in adjusted gross income, $1,000 into an IRA can mean an extra $100 in a tax credit. If it is a traditional IRA, then they can further reduce their taxes by about $200 (federal and state). That $1,000 contribution can cost only $700.
What’s best about this is you can wait to receive your refund before making your contribution.
Comment by The Bear — Nov 7th 2008 @ 10:19 amI have to agree with using your tax refund as part of your IRA contribution. In fact, we usually plan on using nearly all of it (which I guess is probably not a good thing to assume we’re going to get that much of a refund) in our budgets for the year.
Speaking of budgets, I think it’s a good idea for the average person to try and include IRA contributions as part of their overall budgets - since IRAs are such a great deal you want to be sure you can contribute throughout the year. Remember to take into account all the extra bills at the beginning of the year - we usually get hit with various ones all at once (property tax, Xmas bills, mortgage, etc.) so sometimes it’s difficult to also include an IRA contribution at that time.
Comment by Bryan — Nov 7th 2008 @ 11:57 amIf you’re getting a tax refund of over $2100 then you are not reading these personal finance blogs correctly. Adjust your W-4.
Comment by Joshua — Nov 7th 2008 @ 12:40 pmThe fact that there was no increase in the contribution amount for IRA’s is a joke. That is like saying there was no inflation last year. It should have bumped up at least $500.
Comment by Ed — Nov 7th 2008 @ 10:14 pmWhere are you getting that the IRA and Roth contributions limits are unchanged?
It is not in the document you liked to in your source.
That document only outlines contribution limits for 401k plans and similar deferred compensation plans. It only mentions IRAs and Roths in reference to the phaseout limits for contributing, not limits on the amounts of the contributions.
As far as I can tell in my searches, the IRS has not yet officially said what the contribution limits are for IRAs and Roth in 2009.
Comment by J — Nov 8th 2008 @ 1:08 amGreat post! I know a lot of us have been wondering about this stuff. I wish I could find a way to contribute more, but I will do what the gov’t says.
Comment by Jesse W. — Nov 9th 2008 @ 5:43 pmCan an individual with a 403 (b) plan also have an IRA and deposit the maximum in both?
Comment by Dolph — Dec 2nd 2008 @ 8:13 pmYes. Contributions to a 403b, as well as a 401k, do not effect contribution maximums to an IRA. You can still put $5,000 ($5,500 depending on your age) into an IRA if you also have a 403b at work that you contribute to.
And if you rollover your 403b into an IRA, that does not effect the $5,000 maximum (or whatever may be the maximum at the time).
Comment by The Bear — Dec 2nd 2008 @ 11:55 pmThe contribution limits indicated are affected by Adjusted Gross Income (not MAGI) for those who are active participants in most “qualified” pension plans. If not, the limit is the greater of the tabular amount or 100% of compensation.
Comment by Jack McGuigan — Dec 5th 2008 @ 9:37 ami need clarification. I have put $5,000 in a roth ira (not through my company) and I have put $15,500 in my company 403b. Is this allowed by the irs? Is there income guidelines i need to follow in order for me to have done both?
Comment by Maryann — Dec 7th 2008 @ 9:37 pmMaryann, see the comments above yours.
thank you …but what are the agi limits.
Comment by Maryann — Dec 7th 2008 @ 9:58 pm@Jack McGuin: You are wrong. qualification are dependent upon MAGI (irs pub 590). The mix up may be due to the fact that several sites including the IRS pub 590 writes modified Adjusted Gross Income (AGI) and continues to write modified AGI, rather than MAGI.
@Maryann: for 2008 MAGI eligibility
single: MAGI of $101k eligible for max contribution to roth; $116k or over not eligible; in between partial
married joint: MAGI $159k; $169k not eligible; in between partial
married separate: MAGI $9999.99; $10k or over not eligible
@Maryann: yes, you can contribute $15500 to 403b and $5k to roth so long as you qualify to contribute to roth based on MAGI. Your contribution to 403b will reduce your MAGI, so that is one way to get within eligibility if you are borderline.
Comment by Tim — Dec 8th 2008 @ 5:44 amA financial advisor told me I could contribute to a Roth IRA even though my income is over the limit if I do not have a 401K plan. Is this true?
Comment by Chad — Dec 26th 2008 @ 6:30 pm