How Much is the Max for a Roth IRA?
If you have a Roth Individual Retirement Account, the good news is that there is no limit to how much wealth you can accumulate in the account. There are, however, annual contribution limits.
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Function
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IRAs are tax-advantaged accounts that help working Americans save for retirement. You cannot contribute more to a Roth IRA than you earn in a given year. There are also contribution limits; as of 2010, the most you may contribute to a Roth IRA is $5,000 if you are under 50, and $6,000 if you are older.
Considerations
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There are income limits that determine Roth IRA eligibility. For instance, if you are married, filing jointly in 2010, you can only make a full contribution if your modified adjusted gross income does not exceed $167,000. If you make between $167,001 and $177,000, the phase-out range, you may contribute a percentage of the maximum. If your income is over $177,000, however, you cannot contribute to a Roth IRA.
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Misconceptions
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Rollovers are distinct from contributions, and do not diminish your annual contribution limit. There is no limit to how much you can rollover from employer-sponsored retirement accounts or IRAs into a Roth IRA. For instance, you could roll over a 401k worth far more than $5,000 and still contribute up to your maximum earned income limit.
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