A Roth IRA is a tax-advantaged way to save and invest for retirement. To make the most of those tax benefits, you must follow the IRS’s rules—and there are more than a few rules to keep in mind. Here’s what you should know about Roth IRA contribution limits, and how you can avoid overcontributing.
Roth IRA contribution limits for 2023
The Roth IRA contribution limit for 2023 is $6,500 for those under 50, and an additional $1,000 catch up contribution for those 50 and older.
Roth IRA contribution limits for 2024
The Roth IRA contribution limit for 2024 is $7,000 for those under 50, and an additional $1,000 catch up contribution for those 50 and older.
| IRA and Roth IRA contribution limits | ||
|---|---|---|
| Year | Under age 50 | Age 50 and older |
| 2023 | $6,500 | $7,500 |
| 2024 | $7,000 | $8,000 |
Source: Internal Revenue Service, November 1, 2023.
Additional IRA limit provisions to keep in mind
The IRA contribution limits are the combined limit for both traditional IRAs and Roth IRAs. That means, for example, if you’re under age 50 and you plan to contribute $3,000 to your traditional IRA for tax year 2023, your maximum possible contribution limit for your Roth IRA would be $3,500. So although you can contribute to both accounts, your combined contributions cannot exceed the IRA contribution limit—or you may face tax penalties.
You also can’t contribute more to a Roth IRA than your earned household income. If your household income for the year is less than the contribution limit, then your personal IRA contribution may be limited by your earned household income. If you are married and file jointly, your limit may be limited by your spouse’s income if you have no income yourself and are contributing to a spousal IRA.
Roth IRA income limits for 2023 and 2024
How much you can contribute to a Roth IRA—or if you can contribute at all—is dictated by your income, specifically your household’s modified adjusted gross income (MAGI). This is your adjusted gross income (gross income minus tax credits, adjustments, and deductions), with some of those credits, adjustments, and deductions added back in.
Depending on your MAGI and your tax filing status, you are either eligible to contribute to your Roth IRA up to the full IRA maximum, contribute only a partial amount, or contribute nothing at all. Note: If you’re ineligible to contribute to a Roth IRA, you can still contribute to a traditional IRA up to 100% of your income, or the annual contribution limit.
Calculating your MAGI and balancing contributions to multiple IRAs can be complicated, so consult a financial professional if you have any questions around your eligibility to contribute.
| Roth IRA income requirements for 2023 | ||
|---|---|---|
| Filing status | Modified adjusted gross income (MAGI) | Contribution limit |
| Single individuals | < $138,000 | $6,500 |
| ≥ $138,000 but < $153,000 | Partial contribution (calculate) | |
| ≥ $153,000 | Not eligible | |
| Married (filing joint returns) | < $218,000 | $6,500 |
| ≥ $218,000 but < $228,000 | Partial contribution (calculate) | |
| ≥ $228,000 | Not eligible | |
| Married (filing separately)* | ||
| < $10,000 | Partial contribution (calculate) | |
| ≥ $10,000 | Not eligible | |
“Amount of Roth IRA Contributions That You Can Make for 2023,” Internal Revenue Service, October 2022.
| Roth IRA income requirements for 2024 | ||
|---|---|---|
| Filing status | Modified adjusted gross income (MAGI) | Contribution limit |
| Single individuals | < $146,000 | $7,000 |
| ≥ $146,000 but < $161,000 | Partial contribution | |
| ≥ $161,000 | Not eligible | |
| Married (filing joint returns) | < $230,000 | $7,000 |
| ≥ $230,000 but < $240,000 | Partial contribution | |
| ≥ $240,000 | Not eligible | |
| Married (filing separately)* | ||
| < $10,000 | Partial contribution | |
| ≥ $10,000 | Not eligible | |
Source: Internal Revenue Service, November 2023.
Traditional IRA contribution limits for 2023 and 2024
Unlike Roth IRAs, you can contribute up to the maximum contribution limit to a traditional IRA regardless of your income, provided your earned income is higher than that year’s contribution limit. Your ability to deduct traditional IRA contributions from your tax bills is dependent on your income and your workplace retirement plan, and/or your spouse’s
If you want to save even more for retirement than the IRA contribution limit, you can consider contributing to your workplace retirement plan (if you have one), such as a 401(k) or 403(b). If you don’t have access to a workplace plan, you can look into whether you’re eligible to contribute to a self-employed 401(k) or SEP IRA.
What happens if you contribute too much to your Roth IRA?
If you contributed too much to your Roth IRA, you have until the tax filing deadline to fix the mistake. You must remove all excess contributions as well as any investment earnings. Those earnings will have to be reported as investment income. If you remove any excess contributions after you file your taxes, you may need to file an amended tax return.
If you overcontributed to your Roth IRA due to your income limit, you can recharacterize your Roth IRA contributions to a traditional IRA. Just make sure you do not contribute more than the combined IRA maximum. If you recharacterized, check to see if you’re now eligible for any income tax deductions.
You could also apply your excess contributions to tax year 2023. But first verify what you roll over will be eligible within 2023’s limits.
If you don’t catch your excess contributions by when you file taxes, you may have to pay a 6% penalty on those contributions each year until they are removed from the account.
How much should you contribute to your Roth IRA?
It can be challenging to plan out how much to save in your Roth IRA. How can you predict today how much you’ll need in retirement, let alone what accounts to put those savings in? Fidelity suggests saving at least 15% of your pretax income for retirement each year (including any employer match). That amount can be spread out among multiple retirement accounts, including a Roth IRA (where you contribute post-tax money), a traditional IRA, a 401(k) or a 403(b).
Having a plan in place for your retirement can help you reach your financial goals and give you peace of mind that you are on the right track.
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