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IRA Contribution Limits for 2014

The IRS released the new IRA contribution limits for 2014 and they will remain the same as 2013: $5,500 for those under 50, and an additional $1,000 “catch-up” for those over 50. This isn’t too surprising given the low inflation rate this year (as the base contribution limit is inflation adjusted at $500 increments, though the “catch-up” number is not).

There were some adjustments to income thresholds for IRA contribution eligibility. The IRS news release contains all the gory details.

The limits to IRA contributions are trickier than the 401k contribution limits as they take into account four things: your tax filing status; your adjusted gross income (AGI); your age; and you/your spouse’s access to a workplace retirement plan (like a 401k). There are tables for each filing status. If you aren’t eligible for Traditional IRA contributions, you may still be eligible to contribute to a Roth IRA.

Traditional IRA Contribution Limits for 2014

Please note that for all limits, you cannot contribute more than your earned income for the year. So if you are eligible to contribute $6,500 by the rules for age, filing status, and income – but only had $5,000 in earned income for the year then you can’t contribute more than $5,000.

For “Phased” contributions, the limit is scaled by the income range. So if you’re single, under 50 and made $65,000 – you can contribute up to $2,750. This is because there’s a $10,000 range for phase outs and you are in the middle of it at $65,000, which means you can contribute 50% of the maximum.

Single or Head of Household

AGIAge (years)Maximum
< $60,0000-49$5,500
50+$6,500
$60,000 – $70,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $70,000AnyNot eligible

 

Married filing jointly, covered by retirement plan

AGIAge (years)Maximum
< $96,0000-49$5,500
50+$6,500
$96,000 – $116,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $116,000AnyNot eligible

 

Married filing jointly, not covered by retirement plan

AGIAge (years)Maximum
< $181,0000-49$5,500
50+$6,500
$181,000 – $191,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $191,000AnyNot eligible

 

Married filing separately

AGIAge (years)Maximum
$0 – $10,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $10,000AnyNot eligible

 

Roth IRA Contribution Limits for 2014

Single or Head of Household

AGIAge (years)Maximum
< $114,0000-49$5,500
50+$6,500
$114,000 – $129,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $129,000AnyNot eligible

 

Married filing jointly

AGIAge (years)Maximum
< $181,0000-49$5,500
50+$6,500
$181,000 – $191,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $191,000AnyNot eligible

 

Married filing separately

AGIAge (years)Maximum
$0 – $10,0000-49Phased, up to $5,500
50+Phased, up to $6,500
> $10,000AnyNot eligible

2 thoughts on “IRA Contribution Limits for 2014

  1. The amounts you are allowed to pay into a pension per year in the USA seem very mean when compared to the British maximum pension contribution of £50,000 (or $80,000) in any one tax year.
    Its like they don’t want you to save, or have a decent retirement.
    Do you get tax relief on your contributions ?

    • We like to make things complicated here.

      Most employees have access to a 401k, 457 or 403b, whose contributions are made before taxes allowing you to reduce your taxable income (and the limits there are $17,500/year right now). IRA contributions are made with after tax dollars but you get a taxable benefit at tax time – you reduce the taxable income when filing (so similar to 401ks, but it doesn’t just happen for each paycheck you do it manually and get the benefits recognized when filing). Roth IRAs are done with after tax dollars and don’t reduce your taxable income.

      So, it’s a complicated process figuring out what combinations of retirement plans you are eligible for and the total amount you can contribute. But, for some oddball edge cases people have the ability to contribute to many types and more or less avoid taxes entirely, like Justin at Root of Good detailed for himself

      Sadly, I don’t have quite the same ability to avoid taxes like he does (nor does about 99.9% of the population). In my case I can do the max $17,500 in a 401k and $5,500 in my wife’s IRA. So the best we can do is shield $23,000 in income in retirement contributions, whereas he and his wife shielded $56,700 in retirement/pension contributions (and may have been able to do more with IRAs). There are other items to reduce your taxable income and taxes as well: child credits, medical/dental insurance paid pre-tax, health savings accounts, etc.

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