What Is the Max Monthly Contribution for a Roth IRA?
The maximum monthly contribution to a Roth IRA is calculated by dividing your maximum annual contribution by 12. Your maximum contribution is affected by your taxable income, modified adjusted gross income (MAGI), filing status and age.
Other People Are Reading
-
Filing Status
-
Your filing status affects what the limit for your modified adjusted gross income will be. The highest limits are for married couples who file jointly. If you are married filing separately you cannot make a full contribution.
Annual Contribution Limits
-
The limits are set each year based on the changes in the cost of living. For 2009, each individual can contribute a maximum of $5,000 if you are 49 or younger. If you are 50 or older, your maximum contribution is $6,000. If your taxable income is lower than these limits, your taxable income is your maximum contribution.
-
Modified Adjusted Gross Income
-
There are limits on the amount of your MAGI in order for you to still be able to make a contribution to a Roth IRA. These limits are changed each year. For example, in 2009 if you married filing a joint return you can make a full contribution if your MAGI is less than $166,000 and a partial contribution if your MAGI is between $166,000 and $176,000.
Calculating a Reduced Contribution
-
To calculate a reduced contribution, use the following formula where MC is your maximum contribution, U is the upper end of the partial contribution range, L is the lower end of the partial contribution range and MAGI is your modified adjusted gross income:
Reduced Contribution = MC * (U - MAGI) / (U - L)
Calculate Your Monthly Contribution
-
Once you have determined your annual contribution limit, you can divide the result by 12. For example, if you were able to contribute up to $5,000 per year, you could contribute $416.67 monthly. However, the limit is annual so if you do not contribute on one month you can contribute double the next month. Or, if you choose, you could contribute the entire amount in January and not contribute the remainder of the year.
-
