The 2018 IRA Contribution
When this article was published, the IRS had announced the new limits for retirement plans for 2018 last week. Below, we’ll explain what you need to know about your 2018 IRA Contribution Limits.
2018 IRA Contribution Limit (including Self-Directed IRAs)
2018 IRA contribution limits are the same as 2017. Therefore, if you are under age 50, the limit is $5,500. For those 50 and older, you can make an additional $1,000 catch-up contribution, bringing the total limit to $6,500.
2018 Deductible IRA Phase-outs
If you participate in an employer-sponsored plan (such as a 401(k) plan), there are income restrictions for a deduction. If you are single or head-of-household, you can get a full deduction if your adjusted gross income (AGI) is $63,000 or less. It phases out once you reach an AGI of $73,000. If you have an AGI above that means, you cannot deduct your IRA contribution for the year. If you are married filing jointly, you receive a full deduction if your AGI is $101,000 or less. This phases out until an AGI of $121,000. Finally, if you are married, filing jointly and your spouse participates in an employer’s plan, the phase-out starts at $189,000 and you are not eligible for a deduction if your AGI is above $199,000.
2018 Roth IRA (including Self-Directed Roth IRAs) Contribution Limit
Again, the 2018 Roth IRA contribution limits are the same as last year (and the same amount as traditional plans). That means, $5,500 if you are under age 50 and $6,500 if you are age 50+.
2018 Roth IRA Income Limits
You may only contribute directly to a Roth IRA if you are below the income limits. If you are single or head-of-household, you may make a full contribution if your AGI is less than $120,000. Your contribution limit phases out until $135,000, in which you may not contribute to a Roth directly. If you are married and filing jointly, an AGI of less than $189,000 allows for a full contribution. This amount phases out until it reaches $199,000.
It’s important to note that you must have earned income in the year(s) in which you wish to contribute to an IRA. The amount you can contribute is the lesser of the annual limit or your earned income for the year.