Video:What Are IRA Contribution Limits?with Joshua Kennon
IRA contribution limits are put in place by the federal government to control deposits into your IRA. Learn more about IRA contribution limits.See Transcript
Transcript:What Are IRA Contribution Limits?
What Are IRA Contribution Limits?Regardless of the type of IRA you choose, the federal government imposes annual contribution limits. Deposits into your IRA do not have to be made at the same time.
For example, if the IRA contribution limit is $5,000 for a particular year, a person could deposit $416.67 into her IRA each month. At the end of the year, it would add up to the maximum $5,000.
What Is the IRA Contribution Limit for 2011?Due to the tax advantages of investing through an IRA, it is normally best to try and make the maximum annual contribution. The use-it-or-lose-it nature of contributions makes this all the more important. You cannot contribute more than the total allowable amount during any fiscal year.
For the year 2011, the IRA contribution list has put a cap on $5,000 for a person aged 49 and below. For a person aged 50 or above, the maximum permissible contribution amount is pegged at $6,000 for the same year.
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