What you should you know about Roth IRA limits?

Roth IRA is an excellent option for retirement especially for those would like to spend their hard earned money during their retirement years without having to worry about paying taxes on their earnings.

Roth IRA allows a maximum contribution of paying $5000 each tax year depending on the income limit. For people below age 50, $5000 a year considering the income limits and for those 50 and above $6000 to catch up with the savings by the time they retire is allowed.

For those who earn more than $124,000 if an individual and more than $179,000 if married couple filing joint tax returns, Roth IRA cannot be opened.

A detailed look at the limits is as below:

For married couples filing joint tax returns:

• $6,000 if above 50 and combined earned income is lesser than or equal to $169,000
• $5,000 if under 50 and combined earned income is lesser than or equal to $169,000
• Nothing if combined earned income is more than $179,000

For singles:

• $6,000 if above 50 and earned income lesser than or equal to $107,000
• $5,000 if under 50 and earned income is lesser than or equal to 107,000
• Nothing if earned income is more than $122,000

For married couples filing returns separately:

• $6,000 if above 50 earned income is $0
• $5,000 if above 50 and earned income is $0
• $0 if earned income is more than or equal to $10,000

Therefore, not just the income limit but one’s marital status plays a vital role in availing the benefits of Roth IRA. For married couples where an individual files his return separately, if the couple has lived apart for a year, then the individual can qualify for Roth IRA.