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2009 Traditional and Roth IRA Contribution Limits

Written by Nickel - 35 Comments

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
Modified on December 8th, 2008 - 35 Comments
Filed under: Retirement, Saving & Investing

About the author: is the founder and editor-in-chief of this site. He's a thirty-something family man who has been writing about personal finance since 2005, and guess what? He's on Twitter!

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35 Responses to “2009 Traditional and Roth IRA Contribution Limits”

  1. 1
    The Bear Says:

    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.

  2. 2
    Bryan Says:

    I 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.

  3. 3
    Joshua Says:

    If you’re getting a tax refund of over $2100 then you are not reading these personal finance blogs correctly. Adjust your W-4.

  4. 4
    Ed Says:

    The 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.

  5. 5
    J Says:

    Where 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.

  6. 6
    Jesse W. Says:

    Great 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.

  7. 7
    Dolph Says:

    Can an individual with a 403 (b) plan also have an IRA and deposit the maximum in both?

  8. 8
    The Bear Says:

    Yes. 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).

  9. 9
    Jack McGuigan Says:

    The 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.

  10. 10
    Maryann Says:

    i 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?

  11. 11
    nickel Says:

    Maryann, see the comments above yours.

  12. 12
    Maryann Says:

    thank you …but what are the agi limits.

  13. 13
    Tim Says:

    @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.

  14. 14
    Chad Says:

    A 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?

  15. 15
    d Plyler Says:

    Can I continue to contribute to an IRA that is rolled over from a 401k plan? If not how do I build the retirement acct. up? I am on disability at age 57 and no longer able to work. Thanks

  16. 16
    skb Says:

    I’m very confused by Roth vs Traditional IRA contribution/income limits and I would love some help.
    My income on my W-2 for 2008 was $121,349. However, in 2007 after I took deductions I was in that “middle place” where I able to contribute a small amount to a Roth, and I maxed the rest out with a Trad.
    For 2008 I don’t know what my deductions will be yet, so I don’t know if I qualify to put anything into a Roth. But if you are able to use any contribution to a Trad IRA as a deduction (but you can’t with a Roth, right?)….how does this work?
    I don’t get it!

  17. 17
    Tim Says:

    We file jointly. I am employed and contribute to my employers’s 401K. My wife does not have a job. Can she contribute to her IRA accounts that she set up years ago?

  18. 18
    tom Says:

    Is there anyway to contribute to your Roth IRA without a W 2 form.. I lost my job but do have some rental income and would like to try to beef up my roth since it is about half its value due to the market collapse.

    Doesn’t the gov know that some us are still trying to take care of our retirement but jobs are scarce and we need help !!

    And now is the time to buy stock.

  19. 19
    Chris Says:

    Tom,

    You can open a Roth IRA account with a financial institution (ex: Vanguard). Just be aware of minimum investments, fees, etc. At the end of the year they will send you a 1099-R form and then the tax stuff is between you and Sam.

    If you had a 401k plan with your last job you should do a rollover so you can maintain control of your investments and continue to contribute.

  20. 20
    Steve Says:

    The 2009 thresholds for Roth & Traditional IRAs in this article are wrong (your numbers are for 2008). For example, for 2009 Roth IRA for single filers, the threshold range is $105,000 to $120,000. See http://www.irs.gov/publications/p590/ch02.html

  21. 21
    John Says:

    What is the most recent (date) on the irs ruling for the 2009 Roth IRA contribution limits. Is over 50 age 5,000 or 5,500 indexed for inflation plus the 1,000 catch up provision? Also, AGI limits, filing as single, married filing jointly and seperately and qualified retirement plans, what are the effects of these situations… thanks, John

  22. 22
    Britt Says:

    @John – The over 50 years old Roth IRA contribution limit is $6,000, not $5,500 with a $1,000 catch-up…

  23. 23
    Therese Says:

    What is the minimum I need to open a Roth IRA?

  24. 24
    The Bear Says:

    Each individual institution sets its own minimum. The IRS has no minimum.

    A few years ago we opened a traditional IRA for myself and my wife. I was putting away only $500 and $1,200 was going into my wife’s (We needed to open a traditional IRA so that we could lower our adjusted gross income so we could qualify for a tax credit we otherwise would not qualify for). I wanted to open them up with Vanguard because they are the lowest cost mutual fund company out there, but they required a $3,000 initial investment. I looked at Fidelity, but they required $2,000. My wife ended out going with T. Rowe Price ($1,000 minimum to open, slightly higher fees, but still a good fund group) and Van Kampen C share for myself (Van Kampen has $500 minimum to open, higher fees, but you pay a 5.75% sales charge for A shares; C shares have no sales charge). 4 different institutions, 4 different minimums to open an IRA.

    BTW, my credit union has no minimum to open a Roth IRA. If you are looking to open an IRA with a minimum amount of money, check out a local bank or credit union. It will probably be invested in CDs paying CD rates (0.5 – 2.0%) but at least you can start saving and take advantage of the retirement savings credit (if you qualify)

  25. 25
    Esther Says:

    It has been more than six years since I’ve work for the state.gov. I have $12,000 in their retirement fund from my previous state job that is not collecting any interest rate and I need to roll these fund over ASAP

    Can I roll the funds into a Roth IRA this year 9/2009?
    It is the only money I have save for retirement
    I will be 50yrs. old this Aug.

    Please Help

    Esther

  26. 26
    Raymond King Says:

    My wife and I both work and our our individual and joint income meet requirements. We are over 50 and file a joint return. Can we both contribute the maximum ($6000 each) to a Roth IRA?

  27. 27
    Mike Says:

    @Raymond King

    You can both contribute $6000 as long as you qualify under the income limits. For joint filers I believe it is $159,000.

    With regard to an earlier comment about a financial adviser saying you can contribute to a Roth even if you’re over the limit, that is incorrect.

    Be careful of who you listen to, the title of ‘financial adviser’ is not regulated, by that I mean ANYONE can legally say they are a financial advisor. Look for someone who is a CFA or has a CFP (chartered financial analyst, certification in financial planning).

    Source: I have a degree in Finance with a concentration in personal financial planning.

  28. 28
    Chris H Says:

    My wife does not work. We file jointly. We are both under 50. Can I contribute $10,000 through my 401k with my employer, or am I limited to $5,000?

  29. 29
    Mike Says:

    If you’re contributing through your employer then you should be contributing pretax dollars, reducing your taxable income. This is a tradional deductible Ira not a Roth. Check with your employer on this. Roth IRAs are only after tax income. You should be able to contribute the full 12,000 but to be honest I am not positive. Unfortunately the IRS website isn’t clear on this, so your best bet would be to call the IRS directly.

  30. 30
    Mike Says:

    My mistake, I meant to full 10,000 if you’re both under 50. The reason Im not sure is I know you can’t contribute more than your after tax income on paper (ie if for some reason your after tax income according to your return is 4,500, you could only contribute up to 4,500 to your Roth). If your wife doesn’t have an income, she may not get a 5,000 contribution allowance. If she has any income according to your tax returns, you can contribute at least that much above your own 5,000.

  31. 31
    Chris H Says:

    Thank you for your response Mike. Sorry, one more question. My wife has no income at all. If I can only contribute $5,000, and I have already had $6,500 deducted this year for my Roth (which I have), am I going to be penalized in some way? Is there something I can do to reverse it? Thanks again for your help!!

  32. 32
    Paul Says:

    My wife use to work, has no / never had an IRA plan, gets SS from deceased spouse’s SS as income. I still work and have an IRA – we file jointly. We are both 65. Can she start an IRA based on current SS income???

  33. 33
    Vandana Says:

    Hi,
    We recently moved from CA to PA on 09/01/2009.
    So I have two W2 forms one from my CA employer and the other from PA employer.
    While filing the CA taxes, can I deduct the eligible Tradational IRA contribution which I am going to contribute now while staying in PA?
    Or I have to be live in CA while money is added into my existing IRA account.

    I understand that PA state taxes would not allow to deduct 401K or TradIRA contribution at all. So am wondering whether I can make use of it into CA filing, where it is allowed similar to Fed filing.

  34. 34
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