Maximum IRA contribution limits |
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Ronnie
New Member
Cash: $ 1.90
Posts: 9
Joined: 03 Oct 2014
Location: United States |
Maximum IRA contribution limits |
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Hi All,
I am new to this forum and joined because I am "getting up there" and realized I know very little about my retirement accounts and how to manage and grow them. I am quite embarrassed about it. But more importantly, I am trying to set a plan in motion for my retirement. I feel I have lost many years in ignorant bliss and not having a plan and not contributing my maximums. I have about 15 years before I retire - maybe more depending on future health (great now) and job market (I'm in high demand now, but peaking due to age) - though can't see either in my crystal ball.
I have some questions which I am sure are very basic. I did research to find answers, but am a bit confused with the "final answer". Any guidance would be very much appreciated.
Scenario: I am 50 years old, have an AGI of $181K (though will likely exceed that in 2015). I have 2 IRA accounts – one a simple IRA through my current employer who puts in 3% and a traditional account from prior employment years. I also have a tax deferred annuity I can no longer contribute to from a prior employer - but I'll focus on that in subsequent threads, because I really have no clue what that account does or will do and will need to do more reading to at least ask quasi educated questions.
IRA focused Questions:
1. Does the 3% my employer contributes to my simple IRA count toward my maximum annual contribution?
2. What is my maximum annual contribution to the IRAs - I am married filing jointly with an unemployed, stay at home spouse (has never been employed, though may be in the future - 20 years my junior). Is my maximum contribution $6,500 or $13,000 annually?
3. Why can’t I contribute to my IRA once my AGI is above 181K? I have really missed my window of opportunity here!! I could just cry.
Thank you in advance for bridging my ignorance gap!!
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Fri Oct 03, 2014 12:26 am |
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Ronnie
New Member
Cash: $ 1.90
Posts: 9
Joined: 03 Oct 2014
Location: United States |
@blixet... First, thank you for the information, it did clarify it for me. I am understanding the information to mean that I can contribute up to $14,500 annually to my employer provided Simple IRA plan and that is in addition to the 3% they contribute.
And, in answer to your question regarding the cap. It does look like it was talking only about the Roth IRA and not the traditional IRA. So I am taking this to mean there is no salary cap for the 2 types (simple and traditional) that I have. But I am also understanding that I can only contribute the max amount above between the 2 accounts.
So very technical with so many "if then" statements. Thanks again, the good news is, I can contribute an additional $8K annually of my own funds each year which is a relief - of course if i am understanding it all correctly.
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Fri Oct 03, 2014 2:07 am |
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blixet
Preferred Member
Cash: $ 32.55
Posts: 156
Joined: 28 Apr 2013
Location: Southern California |
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Ronnie, you might also want to check out IRS Publication 590:
http://www.irs.gov/publications/p590/ch01.html#en_US_2013_publink1000230467
Scroll down to Tables 1-2 and 1-3. These tables show the income limits for deducting traditional IRA contributions when either you or your spouse is covered by an employer plan. You are phased out at $115,00 due to your SIMPLE IRA at work. If you are married and your spouse is not in an employer plan, her spousal IRA deduction would begin partial phase out at $178,000 and be totally phased out $188,000. Maybe this is where the $188k came from. Of course, if your spouse is covered with an employer plan, then the phase out is the lower $115k amount.
One option for dealing with non-deductible traditional IRA contributions in situations like yours where you are also likely either partially or totally phased out of a Roth IRA contribution is to do a "back-door" Roth IRA, i.e. contribute to the traditional and immediately convert to a Roth. But there are potential tax complications on the conversion based on existing pre-tax IRA account values, so investigate this one carefully before jumping into it.
Information is more valuable sold than used – Fischer Black
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Fri Oct 03, 2014 1:24 pm |
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