IRA Limits PDF Print E-mail
Written by John Coktostin   
Monday, 14 June 2010 19:33
Contribution limits are placed on SDIRAs, as well as the other individual retirement accounts. The requirements and limits change every few years. What is one requirement for one year is not the same requirement for another year.
by JohnCoktostin


Contribution limits are placed on SDIRAs, as well as the other individual retirement accounts. The requirements and limits change every few years. What is one requirement for one year is not the same requirement for another year.

For example, this year the limit is $5,000. A few years ago the requirement was much lower. The limit is $5,000 for people under 50. There is an additional $1,000 that can be added for people that are aged 50 and older.

Traditional individual retirement accounts have two main account types. They have nondeductible accounts and they have deductible accounts. Each are different.

Deductible accounts deduct part of your contributions from taxable income. This is a nice option because you can deduct all, or part, of your contributions this way. It is a popular option for a lot of people.

If you are interested in a retirement plan with a deductible account you need to not have a retirement option through your job. You also need to put only payments through your adjusted gross income. You cannot put in money through other investments.

There is also a limit on how much money you can make. This year the rules state that only people living in a single household can make $65,000 in their adjusted gross income. If you are married the limit is $109,000.

If you do not reach these qualifications there is still hope. There are other IRAs out there for you, such as SDIRAs or Roth individual retirement accounts. Also, if your spouse works and is covered in a deductible account, then you might be able to use part of your money towards their deductible account if you want that option.

Both SDIRAs and Roths have special rules and requirements. They both have their own limits, just as traditional IRAs do. For example, Roth IRAs require that people make below $120,000 for single homes, or $177,000 for married homes.

DISCLAIMER: This article is provided as information only and is not to be taken as financial advice.

NAFEP (The National Association of Financial and Estate Planning) is a leading provider of self directed IRA and self directed 401k products, administrative and custodial services.