2017 IRA, ROTH IRA and 401(k) Contribution Limits
Welcome 2017! 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 bi-weekly paycheck to reach those 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 2017
- For 2017 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.
- 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.
IRA DEDUCTION LIMITS FOR 2017
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 $119,000 you do not get a deduction from your IRA contribution. You are only eligible for a partial deduction if your modified AGI is between $99,000 and $119,000.
- If you are single and have a modified AGI of greater than $72,000 you do not get a deduction from your IRA contributions. You are only eligible for a partial deduction if your modified AGI is between $62,000 and $72,000.
Want to see it another way? Here is how the IRS lays it out:
(Found on the IRS’s website here: http://www.irs.gov/Retirement-Plans/2017-IRA-Deduction-Limits-Effect-of-Modified-AGI-on-Deduction-if-You-Are-Covered-by-a-Retirement-Plan-at-Work)
ROTH IRA RULES FOR 2017
- 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 $194,000
- You are single, or file taxes separately and have a modified adjusted gross income of greater than $132,000
However, if you have a modified AGI between $184,000 and $194,000 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 between $117,000 and $132,000 you are also eligible for a reduced ROTH IRA contribution.
Take a look at the IRS’s table to see it another way:
Image comes from the IRS’s website here: https://www.irs.gov/publications/p590a/ch02.html#en_US_2016_publink1000230977
The link above also includes a worksheet to determine your reduced contribution amount if your income is between $117,000 and $132,000 for single filers or $184,000 and $194,000 for married filers.
401(k) CONTRIBUTION LIMITS FOR 2017
- For 2017 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.
- 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.
Clear as mud?
Happy 2017!
