Roth IRA Contribution Limits For 2011

by Hank Coleman

The IRA contribution limits will stay the same in 2011 as they have been over the past three years. The Roth IRA contribution limits and the limits of traditional Individual Retirement Accounts (IRAs) have not changed since 2008.  Investors under the age of 50 can contribute up to $5,000 per year, and couples can contribute a maximum of $10,000 in a Roth IRA. Investors who are over the age of 50 can make additional catch up contributions of an extra $1,000 per year for a total investment of $6,000 per year per person.

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
2011 $5,000/year $6,000/year

You can make your 2010 Roth and Traditional IRA contributions up until April 15th, 2011. A lot of people forget that they can continue to make contributions to their IRAs up until April. Finishing the maximum Roth IRA contribution up to the limit 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 contribution limits 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 2011 Roth IRA contribution limits, you can start investing in a Roth or Traditional IRA immediately on January 1st, 2011 through the next deadline of April 15th, 2012.

Maxing Out Your Roth IRA Contribution Limits Builds Wealth

There are very few things in the investing world that are as powerful as the affect of a Roth IRA’s compounding interest and tax free investing gains. A Roth IRA’s capital gains, dividends, and interest earned are withdrawn in retirement tax free. The power of using after tax money to build your nest egg is incredible. For example, a person investing $5,000 per year each year for an entire career earning an 8% annual rate of return will grow to approximately $1.6 million from the age of 22 until retirement at 65 years-old.

While the Roth IRA contribution limits have remained unchanged for years, that does not negate the importance of continued investment for retirement.

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Mark December 26, 2010 at 10:35 pm

Too bad the limits didn’t go up for 2011.

Hank Coleman December 26, 2010 at 11:21 pm

You are right, Mark. That would have been great. Maybe next year.

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