in

How to Max Out Your Roth IRA

Roth IRA accounts can be a desirable retirement savings option for many people. Here are some ways to max out your Roth IRA.

IRA Contribution Limits

The contribution limits for both Roth and traditional IRA accounts is $6,000 plus an additional $1,000 catch-up for those who are 50 or over for 2020. If you are eligible based on your income, the easiest way to max out your Roth IRA account each year is to contribute the maximum allowed based upon your age and income.

Roth IRA Contribution Limits – Income

Your income is a factor in determining if you are able to contribute to a Roth IRA at all. For 2020 these are the income limitations* on Roth IRA contributions:

Single filers, head of household or married filing separately but not living with your spouse at any point during the year:

  • There is no reduction in the amount you can contribute if your income is below $124,000.
  • There is a contribution phaseout if your income ranges from $124,000 to $139,000.
  • No Roth IRA contributions are allowed if your income exceeds $139,000.

Married filing jointly:

  • There is no reduction in the amount you can contribute if your income is below $196,000.
  • There is a contribution phaseout if your income ranges from $196,000 to $206,000.
  • No Roth IRA contributions are allowed if your income exceeds $206,000.

Married Filing Separately but did live with their spouse at any point during the year:

  • There is a contribution phaseout at income levels of $10,000 or below, no Roth IRA contributions can be made if your income is $10,000 or above.

*Note that income here refers to modified adjusted gross income (MAGI).

For those whose income would result in a phaseout, they will be limited as to the amount they can contribute to a Roth IRA for 2020. For example, if a single filer who is under age 50 earns $131,500, they would be eligible to contribute $3,000 to a Roth IRA for 2020. They could still contribute up to another $3,000 to a traditional IRA account, either on a pre-tax or after-tax basis depending upon their situation.

If the single filer’s income was over $139,000 they would be ineligible to make a Roth IRA contribution for the year.


Credits: Thestreet

Anyone can publish on ViewTuber. Share Your Creativity!

Flag Post

Cast Your Vote!

237 points

Leave a Reply