IRA Contribution Limits
Regardless of which IRA you choose, Roth or Traditional, there are limits imposed on the maximum amounts one can contribute in a given tax year. A table below will illustrate maximum IRA contribution amounts for the 2007 tax year. After the year 2008, each contribution amount will increase by $500, however, be sure to consult your tax consultant for details.
IRA contributions can take place at various times in the year, so don't worry about having to make one large contribution each year. However, due to the relative tax advantages of an IRA account, it is best to take full advantage of the contribution limit. Do remember that contributions greater than the allowable amount for any given tax year will be penalized, so be sure not to go over your allowable amount.
IRA Contribution Limits
| YEAR | AGE 49 & BELOW | AGE 50 & ABOVE |
| 2006-2007 | $4,000 | $5,000 |
| 2008 | $5,000 | $6,000 |
If perhaps a situation presents itself in which you need money from your IRA, be sure to read about 8 early withdrawal penalty exemptions.
Related Articles
Roth IRA vs. Traditional IRA - Which on is Better
Eight IRA penalty exemptions
Money Market vs. Brokered Money Market
Why start saving for retirement now?
