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Roth IRA Income LimitsThe Roth IRA was designed to help the everyday, average American save for a comfortable retirement, but they can create a windfall for people at any income level because the money in the accounts grows tax free. Because the wealthy of our country don’t need these tax advantages the way the average family does, the government has a set of income limits of Roth IRA that dictate who can take advantage of one of these highly advantaged accounts. The most recent income limits state that a single person can contribute the full amount to their IRA if they earn less than $101,000. If they earn just a little more, they can make a partial contribution. For married couples filing jointly, the maximum income limit is capped at a more generous $159,000. As with singles, married people can still make partial Roth IRA contributions beyond this amount. These Roth IRA income limits are modified almost every year. Why would the government place such strict Roth IRA income limits while most accounts have no income limits at all? It’s because the Roth IRA is simply different. This account first allows investors to take money for retirement after taxes, paying the taxes up front. Although many people think that it is better to take money before taxes, there are actually some good reasons to invest this way. As with many retirement accounts, the money then grows without the US government taking their share of the dividends for taxes. However, when you retire and begin to withdraw money from your Roth IRA, that money is absolutely tax free. This means you can avoid a future tax bill by using this simple account. It also means that your money has grown for years, multiplying many times without interference from the government and tax agencies. Roth IRA Income Limits Go Back To Salary Info Page
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