Who Is Eligible for a Roth IRA?

A Roth Individual Retirement Account offers you a tax-free way to accumulate money for retirement. Income levels govern who can contribute to a Roth IRA, and age determines how much can be contributed per year.

Single Tax Payer

In 2010, if you're a single tax payer earning less than $105,000 a year, you can contribute up to $5,000 to a Roth IRA a year. If your income as a single person falls between $105,000 and $120,000, the amount you can contribute to a Roth is reduced, according to IRS rules, and if your income exceeds $120,000, you cannot contribute to a Roth.

Married Tax Payer

Married tax payers who file jointly must make less than $167,000 combined in 2010 to be eligible to contribute to individual Roth IRAs. If your combined household income exceeds $177,000, Roth IRAs are not available to you, and in between $167,000 and $177,000, the amounts you can contribute are reduced, according to IRS rules.

Rules for 50-Plus

In an effort to help those 50 and older save more for retirement, the government allows those in this age group to contribute up to $6,000 to a Roth IRA, as of 2010. Eligible tax payers younger than age 50 are limited to $5,000 in contributions.

References

• IRS: 2010 IRA Contribution and Deduction Limits-Effect of Modified AGI on Roth IRA Contributions
• IRS: 2010 IRA Contribution and Deduction Limits

Resources

• Kiplinger: Why You Need a Roth IRA