As of 2020, the maximum catch-up contributions that we can make is $6,500 once we’re older than 50.
As of 2020, the maximum contribution that we can make to our IRAs is $6,000 or $7,000 if we’re over 50; however, these contributions are considered separate from the employer-sponsored plans. This means that we can max out on both our 401(k) and IRA.
Income limits on contributions for IRAs
It’s important for us to participate early because of the income limitations on contributions when we start earning more.
When we start earning more, we begin to lose our tax-deduction on our contributions to our Traditional IRAs—while we can still contribute, we just won’t receive a tax benefit.
- The deduction limits if we are covered by a plan are here.
- The deduction limits if we aren't covered by a plan are here.
With Roth IRAs, high income earners are unable to make direct contributions altogether.