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.

12 Responses to “2008 IRA Contribution Limits”

  1. Anonymous

    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

  2. Anonymous

    My 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?

  3. Anonymous

    I 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?

  4. Anonymous

    I’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.

  5. Anonymous

    time 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).

  6. Anonymous

    Do 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?

  7. Anonymous

    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

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