The IRA contribution limits will stay the same in 2010 as they were in 2008 and 2009. Investors under the age of 50 can contribute up to $5,000 per year. Those investors who are over the age of 50 can make additional catch up contributions for a total investment of $6,000 per year.
| Year | Under Age 50 | Age 50+ |
| 2002-2004 | $3,000/year | $3,500/year |
| 2005 | $4,000/year | $4,500/year |
| 2006-2007 | $4,000/year | $5,000/year |
| 2008 | $5,000/year | $6,000/year |
| 2009 | $5,000/year | $6,000/year |
| 2010 | $5,000/year | $6,000/year |
You can make your 2009 contributions until April 15th, 2010. A lot of people forget that seldom talked about fact, but it is a great way to spend any extra money that you have received at the end of the year or beginning of the new year. Finishing off your Roth IRA contributions up to 100 days after the year is over can be a great use of extra income, a year end bonus, or even your income tax refund. As for your 2010 contributions, you can start investing in a Roth IRA immediately on January 1st through the next deadline of April 15th, 2011.
{ 3 comments }
1. Once you are financially set up, having an emergency account is no longer a necessity – as you can “borrow” from one of your other accounts. While I have investments, some are more liquid than others, and those are available if I need them for emergencies. And whatever the situation, I only need $400-$450/month for bare basics, (utilities, groceries, car/house insurance, and property taxes, meds) so it’s pretty easy for me to get by
2. My tax man advised me against a Roth and advised me to continue with the traditional IRA – which is what makes financial sense in my situation. It’s a matter of what works in each individual’s own personal situation.
Leslie,
1. I couldn’t disagree with you more. I think that borrowing from your other accounts is a bad idea. What is the point of having those accounts? They aren’t savings accounts or money market accounts…investment accounts are for investing, saving for saving. Using investments as a savings vehicle is not how they are designed and not the best use of those types of accounts.
2. If you quality to invest in a Roth IRA with its income limitations, you are almost always better off investing in a Roth vs. a Traditional IRA. The tax benefits of a Roth IRA are incredible over a lifetime.
Great idea about the bonus into the IRA.
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