Maximum Traditional IRA Contribution
A traditional individual retirement account (IRA) allows you to contribute money on a tax-deferred basis while reducing your taxable income for the year. The Internal Revenue Service limits how much money you can contribute each year.
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Limit
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As of 2010, the annual contribution limit for a traditional IRA is $5,000. This limit can be adjusted by the IRS each year, if needed, to keep pace with inflation.
Catch-up Contributions
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The IRS offers a "catch-up" contribution for people age 50 and older. As of 2010, the catch-up contribution is $1,000, allowing older taxpayers to contribute up to $6,000 annually.
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Misconceptions
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The maximum traditional IRA contribution does not increase if you are married. IRAs are owned separately, so each spouse is subject to the individual contribution limits.
Considerations
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To contribute to an IRA, you must have earned income at least equal to the amount of your contribution, up to the annual limit. For example, if you only have $2,900 of earned income, you can't contribute more than $2,900 to your traditional IRA.
Warning
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Contributions that you make to a Roth IRA reduce the amount you can contribute to a traditional IRA.
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