The 2011 IRA contribution limits establish the most you can save for retirement using individual retirement accounts. The regular IRA and Roth IRA 2011 contribution limits, plus the 2011 regular IRA deductibility restrictions and the 2011 Roth IRA income limits, are all important considerations.
[Note: If you are looking for the 2010 IRA limits related to the April 15, 2011 tax filing deadline, review the 2010 IRA contribution limits.]
2011 IRA Contribution Limits
The 2011 IRA contribution limits are unchanged from 2010. Since 2008, the most you may contribute to a regular IRA each year is $5,000. However, if you will be 50 or older by the end of the year, you can contribute an extra $1,000, for a $6,000 total IRA contribution limit. Keep in mind you and/or your spouse must have earned income at least as great as the amount you contribute.
These limits apply to both regular and Roth IRAs. Although you may be eligible to contribute to both plans, your combined contribution to both accounts cannot exceed your above limit ($5,000 or $6,000).
2011 Deductible IRA Contribution Limits
Although there is no maximum income restriction for contributing to a regular IRA, there are income limits to deducting regular IRA contributions, which vary based on marital status, income, and workplace retirement (e.g., 401(k), 403(b) plan eligibility.
2011 Roth IRA Income Limits
Unlike regular IRA contributions, not every worker can contribute to a Roth IRA. Based on one's marital status and income, some upper earners are not eligible to contribute to Roth IRAs. But, because these plans are so advantageous to your preparations for retirement, be sure to understand the limits each year before concluding you don't qualify.
2011 Roth Conversion Income Limitations
Even if you make too much money for a direct Roth IRA contribution, you just might have access to a Roth IRA via the backdoor. The opportunity to convert a regular IRA to a Roth IRA became available to all taxpayers regardless of income on January 1, 2010. Previously, a conversion was only available to those who had a modified adjusted gross income of $100,000 or less.