Saving too much for retirement is an unlikely problem — unless you run afoul of contribution limits for individual retirement accounts. The IRS sets this maximum contribution each year, and it applies to total contributions across all IRA accounts.
IRA contribution limit for 2017
The limits for Roth IRA and traditional IRA contributions didn’t change between 2016 and 2017. The current annual limit is:
- Under age 50: $5,500
- Age 50 or older: $6,500
If you have both a Roth and a traditional IRA, your total contributions must not exceed your limit. Though the limits are set by year, you can make contributions to an IRA for the prior year up until the current year’s tax-filing deadline.
Exceptions to IRA contribution limits
This is the IRS, so you’re probably not surprised to hear there are a couple caveats you should know about. First, you can’t contribute more than you earn. If your taxable compensation for the year is $4,000, that’s also your IRA contribution limit.
The caveat to that caveat: If you’re a nonworking spouse, you can have what’s called a spousal IRA as long as your spouse earns enough to cover the contribution. That means if you both want to contribute the maximum to an IRA, and you’re both under 50, your spouse will need to earn at least $11,000.
The limit also doesn’t apply to transfers from other retirement accounts, like a 401(k) rollover.
Additional rules based on income and 401(k) participation
Both traditional and Roth IRAs also impose restrictions in certain circumstances:
- Roth IRA contribution limits: The amount you can contribute is reduced — and eventually eliminated — at higher incomes
- Traditional IRA deduction limits: The IRS limits or eliminates your ability to deduct your contributions at certain incomes if you’re also covered by a retirement plan at work. There is an additional tier of deduction limitations if your spouse is covered by a plan at work but you are not.
Here’s a shortcut: If you’re covered by a 401(k) at work and you earn too much to be eligible for a Roth IRA, you also won’t be eligible to deduct contributions to a traditional IRA. The Roth IRA income limits are higher. If your spouse has a 401(k) at work but you don’t, the income limits to deduct your traditional IRA contributions are the same as the Roth IRA income limits.
Here’s the full breakdown of those limits and phaseouts, which are based on your modified adjusted gross income:
Traditional IRA deduction limits for 2017
|Filing status||2017 modified AGI||Deduction|
|Married filing jointly or qualifying widow(er)||Full deduction up to contribution limit|
|Single or head of household||$62,000 or less||Full deduction up to contribution limit|
|More than $62,000 but less than $72,000||Partial deduction|
|$72,000 or more||No deduction|
|Married filing separately||If you or your spouse is covered: Less than $10,000||Partial deduction|
|If you or your spouse is covered: $10,000 or more||No deduction|
Roth IRA contribution limits for 2017
|Filing status||2017 modified AGI||Maximum contribution|
|Married filing jointly or qualifying widow(er)||Less than $186,000||$5,500 ($6,500 if 50 or older)|
|$186,000 to $195,999||Contribution is reduced|
|$196,000 or more||Not eligible|
|Single, head of household or married filling separately (if you did NOT live with spouse during year)||Less than $118,000||$5,500 ($6,500 if 50 or older)|
|$118,000 to $132,999||Contribution is reduced|
|$133,000 or more||Not eligible|
|Married filing separately (if you lived with spouse at any time during year)||Less than $10,000||Contribution is reduced|
|$10,000 or more||Not eligible|
Updated April 24, 2017.