2015 IRA, ROTH IRA, and 401(k) Limits – Your Guide to 2015 IRS Retirement Account Contribution Limits

Welcome 2015! A new year, which means among many other things, a new year to invest in your IRA, ROTH IRA and/or 401(k). Here are the limits for contributions to IRAs, ROTH IRAs and 401(k)s, and how much you need to be saving each month or each paycheck to reach those limits:

2015 ira_401(k) Contribution limits(Click to enlarge)

 

Confused? (It’s the IRS tax laws – of course you are!) Here it is in text and some of the fine print:

 

IRA CONTRIBUTION LIMITS FOR 2015

  • For 2015 the limit for contributions in Traditional IRAs and ROTH IRAs for those under the age of 50 is $5,500.

That equates to $458 per month to maximize your IRA contributions, or $211 Bi-Weekly.

Also, there is a once in 11 year phenomenon involving the leap year and holidays where in 2015, depending on your employer and pay schedule, you may get 27 paychecks in 2015. For those, you would need to contribute $203 per paycheck in 2015 to max out your IRA contributions.

 

  • For those 50 years old or older, your limit is $6,500 (You get $1,000 in “catch up” contributions).

That equates to $541 per month, or $250 Bi-Weekly, or $240 per paycheck if you are paid 27 times in 2015.

 

IRA DEDUCTION LIMITS FOR 2015

 

Traditional IRA contributions are generally tax deductible. However, if you are covered by a retirement plan by your employer, there are income caps where your contribution may not be tax deductible:

  • If you are married and file jointly and have a modified AGI of greater than $118,000 you do not get a deduction from your IRA contribution. You are only eligible for a partial deduction if your modified AGI is between $98,000 and $118,000.

 

  • If you are single and have a modified AGI of greater than $71,000 you do not get a deduction from your IRA contributions. You are only eligible for a partial deduction if your modified AGI is between $61,000 and $71,000.

 

Want to see it another way? Here is how the IRS lays it out:

IRA_deduction_limits_2015

(Found on the IRS’s website here: http://www.irs.gov/Retirement-Plans/2015-IRA-Deduction-Limits-Effect-of-Modified-AGI-on-Deduction-if-You-Are-Covered-by-a-Retirement-Plan-at-Work)

 

ROTH IRA RULES FOR 2015

  • You are *Generally* not eligible for ROTH IRA contributions if:
    • You are married, file taxes jointly and have a modified adjusted gross income (AGI) of greater than $183,000
    • You are single, or file taxes separately and have a modified adjusted gross income of greater than $116,000

However, if you have a modified AGI $193,000 per year and are married and file jointly you are eligible for a reduced ROTH IRA contribution. Likewise, if you are single, file separately have a modified AGI of $131,000 you are also eligible for a reduced ROTH IRA contribution.

 

Take a look at the IRS’s table to see it another way:

roth_ira_income_limits

 

 

(Image comes from the IRS’s website here: http://www.irs.gov/Retirement-Plans/Amount-of-Roth-IRA-Contributions-That-You-Can-Make-For-2015)

 

401(k) CONTRIBUTION LIMITS FOR 2015

 

  • For 2015 the limit for contributions 401(k)s for those under the age of 50 is $18,000.

That equates to $1500 per month to maximize your 401(k) contributions, or $692 Bi-Weekly.

If you get 27 paychecks in 2015, you would need to contribute $666 per paycheck in 2015 to max out your 401(k) contributions.

 

  • For those 50 years old or older, your limit is $24,000 (You get $6,000 in “catch up” contributions).

That equates to $2000 per month, or $923 Bi-Weekly, or $888 per paycheck if you are paid 27 times in 2015.

 

  • The maximum total of employee and employer contributions into 401(k)s in 2015 is $54,000.

 

401k_contribution_limits

Found here: http://www.irs.gov/portal/site/irspup/menuitem.143f806b5568dcd501db6ba54251a0a0/?vgnextoid=d1101aa275c07310VgnVCM100000351f0a0aRCRD&vgnextchannel=bf082195cc604310VgnVCM1000004e0d010a____

 

 

 

Clear as mud?

 

Happy 2015!

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