This is the time of year to consider funding your retirement accounts. One of my personal favorite vehicles for retirement savings it the Roth IRA. Why? Because once you pay your taxes on this money and place it inside the structure of a Roth IRA, your money is able to grow ( and compound!) tax-free. Then, once you are able to retire, the money is withdrawn free from income taxes. This is very powerful. Consider using the Roth IRA as a supplement to your retirement planning strategy.
Each year, the IRS updates the annual contribution limits for IRA and Roth IRA accounts.
These limits include:
1) How much you can contribute to your Roth IRA annually
2) How much you can earn on an annual basis and remain eligible to contribute.
The Roth IRA Annual Contribution Limit For 2010
$5,000 if you’re under age 50
$6,000 if you’re over age 50
The 2010 Roth IRA Income Limits
Married Filing Jointly
If you’re married, and you file a joint tax return, then you can contribute a maximum of:
• $6,000 if you’re over 50 and your combined earned income is $167,000 or less
• $5,000 if you’re under 50 and your combined earned income is $167,000 or less
• $0 regardless of age if your combined earned income is more than $176,000
Single, Head of Household, or Married Filing Separately (Did NOT Live With Spouse)
• $6,000 if you’re over 50 and your earned income is $105,000 or less
• $5,000 if you’re under 50 and your earned income is $105,000 or less
• $0 regardless of age if your earned income is $120,000 or more
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