Advice for Savvy Retirement Planning

IRA Contribution Limits 2017

IRA Contribution LimitsIRA Contribution Limits

Each year the IRS publishes updated IRA contribution limits, as well as catch-up contribution limits for the new year. Typically, the limits the IRS sets each year is based on inflation factors (with minimum $500 increases), so they do not necessarily increase the limit each year.

The IRA Contribution Limit for 2017 has been established with NO increase over 2016.

The limit on IRA contributions applies to both deductible and non-deductible Traditional IRA’s, as well as Roth IRA’s. You may contribute to either type (if you qualify), but you are still subject to the same total aggregate contribution limit.

Income Limits Adjusted Up $1,000-2,000

IRA contributions are only allowed if your Modified Adjust Gross Income is below a certain level . For single filers in 2016, that income threshold starts at $118,000 (up from $117,000) and ends at $133,000 (up from $132,000). In that range, your contribution is limited, eventually reaching zero. For married filers in 2016, that income threshold starts at $186,000 (up from $184,000) and ends at $196,000 (up from $194,000).

2017 2016
Roth IRA Contribution Limit $5,500 $5,500
Roth IRA Contribution Limit if 50 or over $6,500 $6,500
Traditional IRA Contribution Limit $5,500 $5,500
Traditional IRA Contribution Limit if 50 or over $6,500 $6,500
Roth IRA Income Limits (for single filers) Phase-out starts at $118,000; ineligible at $133,000 Phase-out starts at $117,000; ineligible at $132,000
Roth IRA Income Limits (for married filers) Phase-out starts at $186,000; ineligible at $196,000 Phase-out starts at $184,000; ineligible at $194,000


READ:
2018 Social Security Inflation Adjustment
401K Contribution Limits
Don’t Buy-and-Forget the Investments in Your 401K Plan

Recent History of IRA Contribution Limits:

As you can see, the IRA contribution limits do not rise dramatically each year. Although over time, if investors are diligent about increasing their contributions, it can certainly make a difference.

  • 2017 – $6,000
  • 2016 – $6,000
  • 2015 – $6,000
  • 2014 – $5,500
  • 2013 – $5,500
  • 2012 – $5,000
  • 2011 – $5,000
  • 2010 – $5,000
  • 2009 – $5,000
  • 2008 – $5,000

Over Age-50 Catch Up IRA Contribution Limits

For those of you that are over age 50 (or turn age 50 before the end of the year), you are allowed an additional IRA “catch-up” contribution. These limits have not adjusted for inflation, but may at some point in the future:

  • 2017 – $1,000
  • 2016 – $1,000
  • 2015 – $1,000
  • 2014 – $1,000
  • 2013 – $1,000
  • 2012 – $1,000
  • 2011 – $1,000
  • 2010 – $1,000
  • 2009 – $1,000
  • 2008 – $1,000

IRA Deduction Limits

Roth IRA contributions are not tax deductible.

Your deduction is allowed in full if you (and your spouse, if you are married) aren’t covered by a retirement plan at work.

If you ARE covered by a retirement plan at work, you can see the income limitations at the IRS website by going here.

IRA Income Limitations for Deductible Contributions:

If you ARE covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
single or
head of household
$61,000 or less a full deduction up to the amount of your contribution limit.
more than $61,000 but less than $71,000 a partial deduction.
$71,000 or more no deduction.
married filing jointly orqualifying widow(er) $98,000 or less a full deduction up to the amount of your contribution limit.
 more than $98,000 but less than $118,000  a partial deduction.
 $118,000 or more  no deduction.
married filing separately  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

If you are NOT covered by a company sponsored retirement plan:

If Your Filing Status Is… And Your Modified AGI Is… Then You Can Take…
singlehead of householdor qualifying widow(er) any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly or separately with a spouse who is not covered by a plan at work  any amount a full deduction up to the amount of yourcontribution limit.
married filing jointly with a spouse who iscovered by a plan at work $183,000 or less a full deduction up to the amount of yourcontribution limit.
more than $183,000 but less than $193,000 a partial deduction.
$193,000 or more no deduction.
married filing separately with a spouse who is covered by a plan at work  less than $10,000  a partial deduction.
 $10,000 or more  no deduction.
If you file separately and did not live with your spouse at any time during the year, your IRA deduction is determined under the “Single” filing status.

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Robert Henderson is the President of Lansdowne Wealth Management, an independent, fee-only advisory firm in Mystic, CT. His firm specializes in financial planning and investment management for retirement, with a special focus on the particular needs of women that are divorced or widowed. He is an Accredited Asset Management Specialist and a Certified Divorce Financial Analyst. Mr. Henderson can be reached at 860-245-5078 or bhenderson@lwmwealth.com. You can also view his personal finance blog,The Retirement Workshop at http://lwmwealth.com/blog and the firm’s website at http://www.lwmwealth.com.

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