Looking into retirement savings plans can leave your head swimming in numbers. Don’t let that distract from the all-important task at hand — determining your investment eligibility and contribution limits. Here’s to breaking it down.
401(k) — Employer-Sponsored Retirement Account
How Much Can I Contribute to My 401(k)?
You can contribute up to $18,000 per year to your 401(k). Unless you are at least 50 years old, in which case you can contribute an additional $6,000 “catch up” amount, for a total of up to $24,000 per year.
IRA — Individual Retirement Account
How Much Can I Contribute to an IRA?
You can contribute up to $5,500 annually to your traditional IRA. Unless you are at least 50 years old, in which case you can contribute an additional $1,000 per year, for a total of up to $6,500 per year.
How Many Times Per Year Can I Roll Over my IRA?
You can rollover your IRA every 12 months. An additional rollover before a year has passed could result in income tax due on the rolled over amount, as well as an early withdrawal penalty and an excess contributions tax.
Under What Circumstances am I Eligible for the Saver’s Credit?
The AGI (adjusted gross income) maximum to qualify for the Saver’s Credit in 2016:
- $30,750 for singles and married individuals filing separately
- $46,120 for heads of household
- $61,500 for married couples
ROTH IRA
What Are the Contribution Limits for a Roth IRA?
If you file as an individual (single or head of household), you can contribute:
- The maximum allowable amount ($5,500; $6,500 if you are at least 50 years old) if your adjusted gross income is less than $116,000 per year.
- A reduced amount if your adjusted gross income is $116,000 to $131,000 per year.
- Nothing if your adjusted gross income is more than $131,000 per year.
If you file as a married couple, you can contribute:
- The maximum amount if your combined adjusted gross income is less than $183,000 per year.
- A reduced amount if your combined adjusted gross income is $183,000 to $193,000 per year.
- Nothing if your combined adjusted gross income is more than $193,000 per year.
What is the difference between a traditional and Roth IRA?
MyRA
Under What Circumstances am I Eligible for a MyRA Account?
If you file as an individual (single or head of household), you may contribute to a MyRA account if you have an adjusted gross income of less than $129,000 per year.
If you file as a married couple, you may contribute to a MyRA account if you have a combined adjusted gross income of less than $191,000 per year.
How Much do I Need to Open a MyRA Account?
You can start a myRA account with an initial deposit of as little as $25.
What is the Minimum I Must Contribute to a MyRA Account on a Regular Basis?
You may contribute as little as $5 per payroll deduction.
How Long Can I Contribute to a MyRA Account?
You may contribute up to 30 years or $15,000, whichever comes first.